NetCreditLine.com

As promised the Federal Reserve lashed out at the economy doing another bold move today proving that they are not going to sit back and wait for the economy to fix itself.

Today, the NY Times reported:

WASHINGTON ” Saying that the recession continues to deepen, the Federal Reserve announced Wednesday that it would pump an extra $1 trillion into the mortgage market and longer-term Treasury securities in order to revive the economy.

Investors really liked the confidence of the Fed as the markets jumped immediately after the announcement. This is giving the sign that our fiscal recovery is not that far off in the future.

Last fall the Central Bank held $900 billion on its balance sheet and just prior to this announcement it was sitting at $2 trillion which proved the strong measures that the Fed is prepared to take to get the economy back on track.

More from the NY Times:

Fed officials have said they hope to expand the program next month, possibly to include the huge market for commercial mortgages, and both the Fed and Treasury hope the program will eventually provide up to $1 trillion in total financing.

Okay, there is more money availableso what is the big deal? The Big Deal is that now there is more funding available for lenders to do more loans to residential as well as corporate clients including small business.

Who will make the first move though? This is the major sticking point to the whole things. Until the sales orders come in at a company they are not going to hire more people and start purchasing more raw materials, so who will go first?

The US and Canadian Governments need to start buying more since they are the ones with the money. One they get the orders in then the suppliers will start hiring and the people that are hired will start buying so the suppliers will start hiring and so on

In light of the actions at the Fed I am sure that this announcement is just a prelude to the increased purchasing by the governments and this had to be put into place first.

Next problem will be for companies to have the available funds needed to fill these orders. Even with the funds being available, most companies will not be able to get bank financing due to their financial performance over the last couple of years.

This is the time to speak to a Professional Commercial Finance Broker as they will have far more products available to them than the banks have so you can actually accept the orders and get them out the door.

My expectation is that Accounts Receivable Factoring and Purchase Order Finance will play a major role in our business financing so it would be a good idea to have your financing set up for it so you are not scrambling to find a funder when the orders are rolling in.

Wade Henderson is a recognized Expert in the Business Finance World with over 13 years Experience in the Commercial Lending Field and a strong reputation for getting the deal done. Visit his Business Finance Website to put his experience to work for you.