The Federal Reserve is not kidding when they say that they are going to do everything within their power to help the economy recover and stabilize pricing.

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.

If the Federal Reserve keeps up its attach on the recession the days until we start to see a recovery will come sooner than many economists predicted.

In September 2008 the Central Bank had $900 billion on its balance sheet and now we are nearly $2 trillion which shows the world how serious the Federal Reserve is about getting the economy back on track.

Another note from the NY Times stated:

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.

So the next hurdle will be for companies to get the financing they need to accept these orders. Even with the abundance of funds for companies, many companies will not qualify for bank loans due to their financials over the last couple of year.

Now is the time to sit down with a Professional Commercial Finance Broker as they will have far more financial products available to them than the banks have so you can actually accept the orders that come in and be able to produce them.

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.