November 13th, 2008
WASHINGTON - In response to the credit crunch, today SBA’s Acting Administrator Sandy K. Baruah announced important loan program changes to help the agency’s lending partners increase access to capital for small
businesses.
First, an interim final rule allowing new SBA loans to be made with an alternative base interest rate, the one month LIBOR rate (London Interbank Offered Rate), in addition to the prime rate, which was previously allowed. In the past 60 days, both the prime and LIBOR rates have not yet returned to their historical relationship-of roughly 300 basis points between the two rates. The mismatch between the rates is squeezing SBA lenders out of the
lending market, since their costs are based on the LIBOR rate.
“This change will help more small businesses obtain capital to grow their businesses and create new jobs,” Baruah said. “By allowing both rates, SBA is making its programs more flexible, increasing opportunities to access capital and giving both lending partners and small business customers more options to meet their needs.”
The second change allows a new structure for assembling SBA loans into pools for sale in the secondary market. The enhanced flexibility in loan pool structures can help affect profitability and liquidity in the secondary market for SBA guaranteed loans, especially with the current market conditions. Because the average interest rate is used, these pools are easier for pool assemblers to create, thus providing incentives for more investors to bid on these loans.
“The challenge small businesses face today is not the cost of capital, it is access to capital,” said Baruah. “Interest rates are at historically low levels meaning money is inexpensive, yet lenders aren’t lending and borrowers aren’t borrowing. This indicates markets are frozen due to liquidity concerns. This interim final rule is an important step to reenergize the lenders to make SBA- backed loans and will help open the gateway of capital for entrepreneurs.”
“SBA moved quickly on these changes after consulting with small businesses, lending partners and other government agencies,” said Eric R. Zarnikow, SBA’s Associate Administrator for the Office of Capital Access. “We’re confident these solutions will help free up capital so lenders can continue to make SBA-backed loans.”
By addressing market issues that were impeding the funding streams for both lenders and small businesses, SBA is making capital more available to America’s small businesses. The SBA will be issuing additional technical guidance to lenders in the coming weeks relating to the implementation of these important changes.
For more information on the interim final rule or to share your comments, visit www.regulations.gov. To learn more about SBA’s guaranteed loan programs visit www.sba.gov.
November 13th, 2008
While the debate goes on about whether the government should bail out GM, I’ll weigh in with my opinion.
Yes, the industry has made many mistakes and I blame management for the majority of them. Many jobs are at stake when you add in all the suppliers and service organizations.
GM has expanded into key growth markets like China and Russia and also committed major blunders, including a costly alliance with Italy’s Fiat SpA, heavy use of margin-eating sales incentives, a push by its finance arm into subprime mortgages and a turnaround plan that was based on steady truck sales and left the company vulnerable when gas prices soared.In the meantime, the foreign companies are building new plants in the U.S. and taking market share from the “Big Three”
Maybe GM, Ford and Chrysler should sell off all their foreign owned companies and ventures and focus strictly on the North American market. If you can’t be successful in your home market, why play in somebody else’s yard?
Fix the U.S. market and forget the rest until you’re healthy.
Sometimes “bigger, more” isn’t the answer.
November 13th, 2008
Just saw this on OEM News, an e-mail newsletter….further supports my earlier blogs about GM, Ford and Chrysler!
Toyota Begins Venza Production in Kentucky
$350 Million Investment Leads to New Vehicle Production at Georgetown Plant
11/10/2008
November 10, 2008 - Georgetown, KY - Team members from Toyota Motor Manufacturing, Kentucky, Inc. (TMMK) along with company officials and community leaders celebrated the official launch of the Venza, Toyota’s new, versatile five-passenger vehicle.
Venza couples the styling and comfort of a passenger car with the flexibility of a sport utility vehicle (SUV), to give customers a stylish alternative to the traditional sedan.
“It’s always exciting to launch a new product,” stated Steve St. Angelo, President of TMMK and senior vice-president of Toyota Motor Engineering & Manufacturing, North America (TEMA). “For Toyota to select TMMK as the production site is a real tribute to our team members and the experience of working side-by-side with our design and engineering groups has been very valuable.”
All aspects of Venza’s engineering and design were targeted specifically for the North American market, where it will be sold exclusively. Venza was primarily engineered at Toyota Technical Center in Ann Arbor, Mich., and designed at Toyota’s Calty Design studios in Newport Beach, Calif. and Ann Arbor. Venza will be exclusively assembled at TMMK.
TMMK has the capacity to build about 70,000 Venzas annually. The plant’s manufacturing flexibility allows the Venza to be built on the same assembly line with the Camry, Camry Hybrid and Solara convertible. More than 30 Kentucky-based suppliers will supply parts for the Venza including seats and glass components. Venza’s overall domestic content is approximately 70 percent.
TMMK is Toyota’s largest plant in North America employing about 7,000 team members with the annual capacity to produce 500,000 engines and vehicles.
Toyota (NYSE:TM) established operations in North America in 1957 and currently operates 13 manufacturing plants. In addition, new plants are under construction in Ontario, Canada and Mississippi. There are more than 1,700 Toyota, Lexus and Scion dealerships in North America which sold more than 2.9 million vehicles in 2007. Toyota directly employs over 43,000 in North America and its investment here is currently valued at more than $21 billion, including sales and manufacturing operations, research and development, financial services and design. Toyota’s annual purchasing of parts, materials, goods and services from North American suppliers totals more than $30 billion per year.
Toyota currently produces 11 vehicles in North America, including the Avalon, Camry, Corolla, Matrix, Sienna, Solara, Sequoia, Tacoma, Tundra, Venza and the Lexus RX 350. When production begins in Ontario and Mississippi, Toyota will have 15 manufacturing plants with the annual capacity to build approximately 2.2 million cars and trucks, 1.49 million engines and 425,000 automatic transmissions. For more information about Toyota, visit www.toyota.com.
