Speaking on MSNBC recently, Keith Ashmus of the National Small Business made the statment that banks have been refusing government funds to issue loans to small businesses because they don't want to deal with the additional red tape! Incredible!
The topic was the $30 billion dollars proposed by President Obama during his state of the union address last week.
I'm sure that all this means is that you basically need to be able to spend the money from your own pocket to get the loan... Only works for the big boys.
Tonya Wilson, one of our guest bloggers on Business.gov, recently commented on this issue:
'I think that all banks across the country have gotten together to come up
with a common response to the question 'Are you lending to small
businesses?' The response I have heard in almost every instance is
'We're lending if the businesses qualify.' What?!?
The last two years
have been a perfect storm of tightened credit standards and the economy
negatively impacting small business P&L statements. The result…
fewer businesses 'qualifying' for credit.
Here are a few things you
MUST know if you are going to be able to break this credit strangle
hold...' Read the full article at '...If They Qualify'
Message Edited by NicoleD on 02-05-2010 10:03 AM
Tonya Wilson, one of our guest bloggers on Business.gov, recently commented on this issue:'I think that all banks across the country have gotten together to come up
with a common response to the question 'Are you lending to small
businesses?' The response I have heard in almost every instance is
'We're lending if the businesses qualify.' What?!? The last two years
have been a perfect storm of tightened credit standards and the economy
negatively impacting small business P&L statements. The result…
fewer businesses 'qualifying' for credit. Here are a few things you
MUST know if you are going to be able to break this credit strangle
hold...' Read the full article at '...If They Qualify' Message Edited by NicoleD on 02-05-2010 10:03 AM
The ending statement to that blog post was:
'Know how to play the game and work within the banking system and you 'will qualify'. '
That is quite a definitive statement. You 'will qualify'? Oh really? Let's ask all those that have applied for an SBA backed loan and met the qualifications that were still turned down what they think of that statement.
Long before the current economic crisis, I had applied for an SBA backed loan. I met every requirement, including the 20% cash on hand, excellent credit, strong collateral and a stellar business plan (SBA loved it). The only thing lacking was industry experience. Although I did have strong management experinece in my background, it was not directly related to the business I wanted to open. I was turned down. Mind you, the SBA rep, banker, town depvelopment committee, SBDC, all agreed this business was 'perfect' and they had already approved the proposed site, I was still shot down in the end for lack of industry experience.
Now with the lending climate being what it is, Ms. Wilson is actually going to make the statement that you 'will qualify' for a loan?
So they don't want the cheap funds because tiof the added hassle? I guess they aren't hurtin as much in the aftermath of the credit crunch as they claim to be.
One would think that with the slew of foreclosures and mortgage defaults they'd be keen to issue loans at low risk.
laurafily | Window Shopper | 6/23/2010 - 2:09 pm
NicoleD | Former Moderator | 2/5/2010 - 10:02 am
bizdev | Creator | 2/5/2010 - 1:56 pm
mrhelpful | Contributor | 2/4/2010 - 5:33 pm
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