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SBA and America’s Banks Continue to Increase Small Business Lending

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SBA and America’s Banks Continue to Increase Small Business Lending

By Jeanne Hulit, Former Acting SBA Administrator
Published: September 20, 2013 Updated: September 20, 2013

Two years ago, Vice President Biden and former U.S. Small Business Administration (SBA) Administrator Karen Mills announced that 13 of the nation’s largest banks had committed to collectively increase lending for small businesses by $20 billion over the course of a three-year commitment.

And today, I’m pleased to announce that these 13 banks have already increased their total lending by roughly $17 billion in the past two years, putting them on track to meet their goal by the end of 2014. The continued success of this commitment is an important example of the vital role played by both the public and private sectors in supporting America’s 28 million small business owners and entrepreneurs.

Small businesses are the engine of our economy, creating two out of every three net new private sector jobs and employing more than half of our nation’s workforce.  When President Obama first took office, America was facing the worst economic environment since the Great Depression, but SBA worked closely with our lending partners to give small business owners across the country the access and opportunity they needed to weather the crisis and help get our economy back on track.

After a career in commercial banking before joining SBA and, as the head of SBA’s Office of Capital Access, I’ve seen first-hand the critical role played by private-public partnerships to get capital into the hands of the entrepreneurs and small business owners who drive our economic growth.  And this increase in lending continues to have a meaningful impact on small businesses and communities across the country.

Under the Obama Administration, SBA has stepped up to support more than $105 billion in lending to over 185,000 small businesses, including two record years of supporting more than $30 billion dollars in loans in FY 2011 and FY 2012, respectively.  We’ve streamlined and simplified SBA loan programs to create more access and opportunity for both banks and borrowers.  And, in addition to this commitment, we’ve also brought 1,000 community banks back to SBA lending for the first time since 2007.

We believe that entrepreneurs and small business owners are one of our nation’s greatest strengths. And now, more than ever, SBA and our lending partners are committed to getting capital into the hands of the entrepreneurs, innovators and small business owners that are poised to grow our economy and create good, middle class jobs in their communities.

The banks participating in the commitment are: Wells Fargo, Key Corp, Regions Financial Corporation, Huntington Bancshares Incorporated, M&T Bank Corporation, JP Morgan Chase & Company, Citizens Financial Group, Inc., Citigroup, Bank of America Merrill Lynch, TD Bank, US Bank, PNC Bank NA., Sun Trust Banks, Inc.

About the Author:

Jeanne Hulit

Former Acting SBA Administrator

Jeanne Hulit is the Acting Administrator of the U.S. Small Business Administration. The SBA helps both Main Street and high-growth small businesses get access to capital, counseling, federal contracts, disaster assistance and more.


U.S. Government policy is always to make reasonable and accurate, very difficult business to the practical actions like this.
We laude SBA efforts to support funding for small businesses and find the statistics impressive. However, despite these programs, there are many small and entrepreneurial ventures across America that are struggling because they cannot access the funding they need to start and grow their ventures. We connect with over 2.5 million small and start-up operations each month and find that the majority of these firms and individuals are experiencing difficulty in securing financing from local banks. We encourage our audiences to think strategically and look for alternatives to traditional bank financing. The most important thing that they can do is avoid spending the money. This can happen through careful budgeting and cost controls and by utilizing high value products and services that can substitute for full time employees at a fraction of the cost. They can also look at financing alternatives such as leasing vs. buying, accelerating payments on receivables through effective receivables management, negotiating for supplier credit lines and extended terms, or even through unusual programs such as a merchant services advance. As an example, a Merchant Services Advance provider such as Swift Capital will purchase future credit card transactions in return for a small surcharge on the actual transactions. To qualify, a firm must have been in business for a minimum period of time and have a minimum level of credit card sales. The Foundation for Entrepreneurial Research and Development (FERAD) a nonprofit, offers a highly effective online business development training program, 5 Steps to Successful Self-Employment, where participants can learn interactively and work with an ementor such as a SCORE or SBDC counselor in developing a strategic plan for their venture. The 5 Steps program is available for free for all users. Through the 5 Steps approach, users can examine each component of their operation, understand the strategic alternatives available and then how to select the choices that best support the development and profitability of their business operation. We are truly in a time where thinking smarter and acting strategically can build business success, even in a tough economic environment.
This policy of the U.S. is great. i like its.
I am successfully self-employed, I have enough income to support myself and pay 2 other workers, but when I needed help to expand my business to the new level, to rent an office and buy more equipment, I was denied. They don't care about your business, they don't care that you are making money, what they care about is your past credit, they fail to look in to the future and project success, what they look at is your credit report and if your score is low they will not help you. My credit score is bad because of my student loan problems, I am repaying the loans, but it will take at least 5-10 more years to repay the $200k that I owe. I was hoping that lending under SBA will help me grow my business, because all I need is new equipment and couple of more workers to help me with the workload, but I don't have extra cash at the moment to do that. The opportunity will not last for long, my clients will just look elsewhere, even though they really love my work and don't understand why I keep declining them. I could be a successful growing American Dream business, if only the landing was allowed for people with lower credit scores, it is a shame that they only care about already successful individuals and business and allow only them to grow... There are many small businesses and individuals who need just an extra help, who can be successful if given a chance, but denied because of their credit score. This system is corrupt, it only helps the successful to become even more successful, it doesn't trust anybody else. You need to have close to perfect score to get any SBA loans, that is not much help, because with perfect score you can get a loan anywhere, this is not fair, because perfect score is not the future of success it is merely a present situation, the score might change anytime, and if they are so ignorant to just treat you as a score then there will be no growth in this economy.
Amen brother: they are not trying to help no one: I'm a disable American veteran 100% honorable discharge: Good credit scores 659 649 672 they told me I need 20% down for my startup business: I was applying for patriot express which is strictly for startup: I been to Bank Of American, Wellsfargo, Regions Bank, First Citizen: Man I been every where : either I needed 20% down of $95,000 are: Their not lending at this time for restaurant: This is what I shed my blood for: This country hates it's veteran: It's only lip services for T.V: There only interested in helping business who really don't need any help: I would have died for this country: I have submitted a patriot loan to TD Bank and still waiting to here back from them: It's been 4 days now:
I am enrolled in the SBA's E200 course. The class meets every other week teaches useful info on marketing, HR, Finance, Planning. There are 15 business owners in the class looking to grow their businesses. We recently completed the financial section and I prepared a financial presentation about growing my business. Wanted to get a little feed back from the big three SBA lending institutions US Bank, Wells Fargo and JP Morgan, if I remember correctly. I showed up, I guess the SBA invited the Banks to come and visit the class. Don't know what happened. Not a single banker from any bank showed up to help. Looks like we were screwed. We the taxpayers bailed out the largest banks in 2008. I think we made a big mistake letting them go. Consideration should have been given to chopping these monster banks up into smaller regional or local banks who depend upon small businesses like ours to exist. To big to fail... To big to show up to a Regional SBA Emerging leaders class to help out. This system appears to be broken. Maybe we should look at legislation to correct this. One thing I did learn is that the big three use a "mold" when looking at SBA loans, if your business doesn't fit the mold you don't get a shot at financing. What that mold is I don't know maybe one or all of them will share with us. Won't hold my breath. Who is the customer here anyway. If I treated my customers the way these banks treat with me I would be out of business next month.
I will not complain. The life in this country is so different than it was just 10 years ago. I have acquired land that is located in a prime spot in Tallahassee, Florida and need to redevelop the area to improve this area. I have been looking for financial help and keep hitting roadblocks that are hard to get around. If there are loans to be gotten for a start up business I need to know where to look. I have a business plan already written up on SBA create your business. Someone needs to look at the struggling start ups like me and consider helping. Good luck to all the American start ups in America for Americans and the US economy.
You also forgot to mention that most of the banks on the list took government bailout money. No one is bailing out Main Street businesses. Lending has not been loosened to the smallest of businesses. Why don't you come to Main Street and look around at all the businesses that could use a little extra help? What percentage of those businesses were under five employees?
Ms. Hulit, After having a career in commercial banking, you know full well that these statistics are misleading and in fact, they demonstrate that the SBA has strayed from a commitment to small business. What your maco-statistics say is the SBA hsa backed more lending and the banks are supposedly helping small businesses again. What you don't report is the micro-statistics and facts behind them: 1) In the last four years the SBA expanded their already absurdly broad definition of "small" to include tens of thousands of more large businesses. 2) The Result? The SBA backs fewer, much bigger loans to much bigger businesses than they used to. The SBA has backed fewer loans below $250,000 each year in the last two years, and last year, the SBA backed fewer loans under $100,000 than at any time in their 60 year history. You need to stop touting your $30billion number - it is misleading. There are 28 million businesses in America and 98% of them, 27.5+million, have 1-19 employees. Those companies are receiving almost no SBA loans, and the 21.5 million with no employees, fully 75% of all U.S. businesses, are completely off your radar. This is not the SMALL Business Administration. You are focused on businesses with 100 to 500 employees and up to $35 million a year in revenues. A business with 100 employees is in the top 1/2% of the biggest businesses in America (U.S. Census). A business with 500 employees is in the top six one-hundredths of the biggest - there are only 17,000 of them out of 28 million. How, in anyone's definition of small, are those businesses small? Stop giving macro facts that make you look like you are supporting small business. Start reporting on what you are actually doing to serve the 98% of businesses with 1-19 employees, the true small businesses of America. I understand the problem you will have doing that - there is nothing to report. That doesn't give you license to play loose with the definition of small.
Now it is pretty clear that small scale business & entrepreneurs holds a valuable position in the economy, since they are also referred as nation builders. Without the initiative by SBA, growth of small business would have been a far sighted dream. But with the ongoing trend, one can think of better time ahead.


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