Friday, October 7, 2011

Small Business Lending Fund vs Clean Energy Fund?

The Small Business Job Act created a $30bl fund to capitalize small business through community bank loans.  The DOE's loan guarantee program   is a fund to assist clean/green energy business's with  loan guarantees for certain renewable energy systems.   Both programs have merit.  Both could create much needed jobs and economic expansion.   Both programs were enacted by the Obama administration.   Then why was one created with tight restrictive rules and regulations and one with loose almost non apparent rules and regulations.

 The Small Business Lending Fund, set up last year with $30 billion to help banks jumpstart lending, disbursed a mere $4 billion and is to expire.  The DOE's program subsidise nearly $11bn in loans.  The Small Business Fund was a nightmare for community banks to get approval, while the DOE's fund was issuing funds easily and even to losers like Solyndra.  

This comparison begs the question why in our current economic mess would we restrict capital to small business and freely give it to green energy?  Small Business has and will all ways be the engine of the US economy.  What are your thoughts on why the programs were put in place in this manner?