Treasury Completes Wind Down of TARP Small Business Program

The United States Department of the Treasury announced the fifth and final disposition of securities within its Small Business Administration (SBA) 7(a) Securities Purchase Program, which was launched as part of the Troubled Asset Relief Program (TARP). On January 24, 2012, Treasury sold the eight remaining securities in the portfolio for approximately $63.2 million in proceeds. 

                                                                                                          

This sale marks the successful wind down of another TARP program. In total, Treasury recovered $376 million through sales ($335 million) and principal and interest payments ($41 million) over the life of the SBA 7(a) Securities Purchase Program, representing a gain of approximately $8 million to taxpayers on Treasury’s original investment of $368 million. 

 

Treasury launched the SBA 7(a) Securities Purchase Program as part of the Obama Administration’s efforts to help address the difficulties facing small businesses in the wake of the 2008 financial crisis. The actions that the Administration has taken include steps to provide more credit to small businesses in the primary market by temporarily increasing loan guarantees from 75 percent to 90 percent of an SBA 7(a) loan balance and eliminating certain loan origination fees as part of Recovery Act, and other important measures. Additionally, the Small Business Jobs Act President Obama signed into law in 2010 established two separate Treasury lending initiatives: the Small Business Lending Fund, which has provided capital to community banks with incentives to increase their small business lending; and the State Small Business Credit Initiative, which supports state-level small business lending programs. Read more.