Obama, facing criticism over his moves to bail out big banks and financial institutions on Wall Street, said help was on the way for small business owners who also are hurting in the deep US recession.

"Small businesses are the heart of the American economy," he said during an event attended by small business leaders at the White House. "They're responsible for half of all private sector jobs and they created roughly 70 per cent of all new jobs in the past decade."

The programs announced on Monday build on $730 million for small businesses included in the $787 billion stimulus package approved by Congress last month to help the economy out of recession.

Some of the funds will be used to reduce fees on the Small Business Administration's main loan program, and others will be used to expand the portion of the loans guaranteed by the federal government.

The Obama administration also announced new actions, including allowing small businesses to take a bigger tax break on their losses.