WASHINGTON - President Barack Obama, looking for ways to drive down high U.S. unemployment, will announce plans on Friday to expand credit for small businesses, a main source of job creation in the United States.

Obama meets with small business owners in suburban Maryland and later will announce plans to ask Congress to temporarily expand credit through two Small Business Administration programs, a White House official said.

One plan would expand an existing SBA program to support refinancing of loans for owner-occupied commercial real estate.

The White House official, who spoke on condition of anonymity, said the proposal would help refinance up to $18.7 billion worth of commercial real estate per year that might otherwise be foreclosed and liquidated.

To be eligible, small businesses must have certain types of first mortgage loans maturing within the next year. Firms would have to be current on payments for the previous year.

Obama will also propose a temporary increase in the cap on SBA Express loans to $1 million from $350,000. The added cost would largely be covered by fees, the official said.

The White House official said expanding the loan size would help a broader range of small businesses.

Announcement of the two programs comes just three days after Obama proposed using $30 billion from the TARP bank bailout program to create a lending fund for small businesses.

The White House official said the programs to be announced on Friday would complement Obama's broader agenda for boosting small business growth. The president is under intense pressure to reduce the 10 percent U.S. unemployment rate.

He plans to ease some taxes on small businesses, including eliminating capital gains for small businesses in 2010, the official said.

Obama also plans a tax credit that would pay up to $5,000 for every net new job. It also would cover payroll taxes on overall wage increases above inflation. The plan would cut taxes for more than 1 million small businesses, the official said.

(Editing by Jackie Frank)