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Old 12-08-2010, 10:42 AM   #44 (permalink)
aceventura3
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Location: Ventura County
Quote:
Originally Posted by Baraka_Guru View Post
To be honest, I don't know the American small-business environment well enough to really gauge how things are unfolding of late.

What specific comments do you have about the small business bill?
What about the $30-billion fund for small-business loans?
And don't a vast majority of small businesses earn under $250,000/year gross?
The quote below specifically references conditions in California but it is reflective across the country. Credit abruptly dried up in 2008/2009, it was virtually impossible to get new credit unless you were a perfect risk (basically you don't need the money), lines-of credit were frozen, and rates/fees went up drastically. Even after the bailouts, banks did not and are not lending. Conditions were created where banks had to "fix" their balance sheets often just based on the rhetoric and threats from Washington. On top of that banks could get "loans" from the Fed at virtually no cost and then buy treasuries at no risk...it was and still is craziness...we need focused leadership.

Quote:
If the big bank bailouts were supposed to trickle down to small businesses needing loans, it’s an arid landscape in California, according to a new report from the California Reinvestment Coalition.

“Despite a $700 billion bank bailout and strong reported bank profits, the increased levels of bank lending to small businesses promised by former Treasury Secretary Henry Paulson and others has not occurred,” the report says.

(Download a copy of the report by clicking on the link below.)

The report, written by Alan Fisher, a researcher with the San Francisco-based group, says that the state’s five major banks -- Bank of America, CitiBank, US Bank, Union Bank, and Wells Fargo -- have decreased their Small Business Administration lending. “Bank of America and Citi’s SBA lending have dropped the most among the major banks between 2007 and 2009 -- decreasing their lending by 97 percent and 99 percent, respectively,” the report says.

Mr. Fisher says that Bank of America provided 2,304 SBA loans in California in 2007, but only 74 in 2009 and Citi made 906 SBA loans in 2007 but only 10 in 2009.

“The impact on business districts is clear as businesses shutter and empty store fronts become more common in California and the nation,” the report says.

The report says the change is due to two developments: Banks tightened their small business underwriting in 2007 to limit access to a “tiny few” and have loosened them only slightly since; and, federal regulators and the U.S. Treasury have been “more concerned with propping up financial institutions and Wall Street than ensuring the economic vitality of American small business.”
http://www.centralvalleybusinesstime.../001/?ID=17038
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