Warren Buffett, Goldman Sachs Team Up To Aid America's Small Businesses...Job Creation

Goldman, Buffett to aid small businesses


Goldman Sachs (GS) might be one of few companies to have survived the economic downturn with profit to spare, so the company is giving back.

Goldman is teaming up with investing guru Warren Buffett in launching a $500 million initiative called "10,000 Small Businesses," which aims to provide assistance ranging from financing to lending programs for 10,000 small U.S. companies.

"Our recovery is dependent on hardworking small-business owners across America who will create the jobs that America needs," Buffett said. "I'm proud to be a part of this innovative program, which provides greater access to know-how and capital -- two ingredients critical to success."

Buffett is Goldman's biggest shareholder. The project will be co-chaired by Buffett, Harvard professor Michael Porter and Goldman chairman Lloyd Blankfein.

"Small businesses play a vital role in creating jobs and growth in America's economy," Blankfein said. "We are pleased to work with our partners in this initiative to support small-business owners, particularly in those underserved communities."

The program will contribute $200 million to community colleges, universities and other institutions for business education. Goldman will invest $300 million in Community Development Financial Institutions, which will help provide lending and philanthropic support to low-income and underprivileged areas.

The $500 million is about 3% of the $16.7 billion Goldman has set aside so far for compensation. The company paid back the $10 billion in Troubled Asset Relief Program funds it owed the government in June.

The financial-market meltdown has caused many banks to hold off lending to small businesses, and the credit crunch has prevented many small-business owners from getting the credit lines they need to keep their businesses up and running.

In related news, Blankfein apologized for Goldman Sachs's role in some of the activities that led to the financial crisis, saying that the company "participated in things that were clearly wrong, and we have reason to regret and we apologize for them." Blankfein spoke at a conference Tuesday that was sponsored by Directorship magazine. He was named him its CEO of the year.



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Sources: CNBC, MSN, Goldman Sachs, Wikipedia, Google Maps