On Monday, CNN reported that the U.S. Treasury issued a report which indicated that the top 22 banks that got the most TARP money in the federal financial institution bailout decreased their lending to small businesses by $10.5 billion in the last six months. This happened despite President Obama specifically asking the large banks to step up their small business lending in order to aid economic recovery.
Of course, small businesses already knew this due to their inability during this entire year to get the loans and lines of credit they need, including the ARC loans.
Three of the 22 banks made no small business loans since April, when a requirement went into effect that banks report their small business lending. Fifteen other banks reported a significant drop in small business lending with Wells Fargo leading the way. Banks are under pressure to improve their balance sheets and they see small business loans as risky.
Someone should ask how small business loans with Small Business Administration guarantees are risky and why the banks won't go ahead, at least, with ARC loans and the SBA 7(a) loans with increased loan guarantees? Could it be that they just don't want to deal with the paperwork and it's easier not to do it than to help small businesses?
Is your small business having trouble getting an ARC loan? Share your experience with us!
If you have had trouble with getting a bank loan or losing your line of credit, leave a comment. We would love to hear your story!
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