New York, New York, United States (AHN) – The American International Group announced Wednesday it will repay the U.S. Federal Reserve $21 billion credit line. AIG will fund the repayment from the sales of two life insurers from outside the U.S.

After paying back what AIG borrowed from the regulator in 2008 at the onset of the financial crisis, the insurance giant will focus on retiring its obligations to the U.S. Treasury Department. The Treasury invested $48 billion in AIG and owns 80 percent of the company.

The Treasury said it plans to convert its AIG preferred shares into 1.66 billion shares of common stock by March 15.

The Treasury, according to reports, is planning to sell up to 20 percent of its AIG shares in the first quarter of 2011 as part of its unloading its stake in the insurance giant.

The stock offering is expected to raise at least $15 billion. The securities will be sold to private investors, similar to what the Treasury did with its Citigroup and General Motors holdings.

Since January, AIG shares gained 41 percent on the New York Stock Exchange to $42.22. If the Treasury sells its AIG stocks at $29 per share, finance experts said the Treasury will break even on its investment.

A Treasury official said the AIG action dovetails with Washington’s strategy to exit investments in private companies as soon as practical, while protecting taxpayers’ money.

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Small Business Administration:

The SBA does not directly offer grants to individuals for business expansion or start-up. For individual set-ups, it provides a wide variety of loan programs on easy pay back terms. However, the SBA does offer many types of grants programs indirectly to benefit small business entrepreneurs. SBA grants programs are specifically designed to expand and enhance those organizations that provide small businesses with technical or financial assistance. These monetary grants generally support state and local governments, non-profit organizations and intermediary lending institutions.

Small businesses can in turn avail the grants from these institutions. The entrepreneurs need to have a workable business plan and meet the required basic criteria to avail the loan or grant from SBA supported institutions. These funds can be then utilized to either set-up or expand the existing businesses. SBA has very special and easy terms to offer business grants to women entrepreneurs and members of the ethnic minority groups to help them become economically independent. This leads to numerous co-related activities and finally development of underdeveloped regions of the vast country. It brings about a social change and societal uplift.

Benefits of Grants from SBA:

A grant is a direct financial contribution made without any expectation of a repayment but with very specific expectations of the required outcome. These programs are designed to encourage and assist entrepreneurs in starting their own ventures. This promotes an economic development and integrates the individuals into the mainstream of American economic society. Organizations that give grants exclude for-profit businesses, but encourage small businesses to take their grants. The grants are readily provided after meeting certain basic criteria.

Women entrepreneurs are the largest beneficiarys of governments generosity for special encouragement. Federal grants are extended to those non-profit organizations that provide counseling, training and other technical support to women groups. The SBA runs special help centers and womens business centers to train the women technically. They give access to credit and capital, provide with government contracts etc as well.

Ethnic minority groups too are special beneficiaries of federal governments financial grants on easy terms. SBA runs a Minority Enterprise Development Program known as the 8(a) program. This helps the minority entrepreneurs to bag the government contracts for the utilization of their products.

Small business people or groups are very hard working and enthusiastic about their business. They spend quality time to develop it and stay in touch with their work, as they do not have too many people to help. Their businesses take precedence over their family, friends or even vacation plans. They stay in constant touch to avoid failure or any unprecedented disaster. This helps in successful maturation of their businesses after an initial set-up time.

Author: Alexander Gordon
Article Source: EzineArticles.com
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