Risky Business

Have TARP's Executive Compensation Limits Doomed The Small-Business Bailout?

By Matthew Bandyk

Posted: March 31, 2009

According to a new article in American Banker magazine (available online to subscribers only), Obama's plan to end the credit crunch for small businesses is "in jeopardy." (To get some background on that plan, click here.)

Treasury is using $15 billion to fund new SBA-guaranteed loans. What's the problem? It seems that the most important SBA broker-dealers don't like all the strings attached to the money--most prominently the executive compensation limits:

The conditions have already spooked the four large private SBA broker-dealers - Cantor Fitzgerald LP, Vining Sparks IBG LP, Coastal Securities Inc. and Shay Financial Services Inc. - which, according to sources, have all indicated they have no plans to participate in the program.

"I don't think anyone's going to do that," said Scott Taylor, a vice president in Memphis for Shay Financial Services.

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Risky Business

Risky Business

Matt Bandyk, a reporter for U.S. News, explores capitalism from where it all begins, with the entrepreneur, whose risk taking and experimentation provide the roots from which the rest of the economy grows. As much courage as it takes to create one's own business, even the entrepreneur needs some help, and this blog will look at news, trends, and practical advice for starting and running a small business.

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