Some investors plan to use government financing to invest $10 million to $20 million each in bonds backed by card and other consumer and small-business loans.
Starting March 25 the Federal Reserve Board plans to disburse $200 billion of loans under its Term Asset-Backed Securities Loan Facility. A company could leverage $1 million of its money with a $9 million Fed loan to buy $10 million of asset-backed securities.
"It certainly makes it more manageable for smaller investors to buy new issue asset-backed securities by taking advantage of the program," said Mark Fontanilla, a managing director at CapitalFusion Partners LLC in Los Angeles.
He said his firm is looking to invest $10 million to $20 million through the program.
Mansoor Ghori, the president of Accent Capital LLC in Austin, said it has started assessing the facility.
Accent Capital has about $15 million to put to work and is "looking for assets to invest in," Ghori said.