Fixing the Small Business Lending Crisis

By Frank Knapp Jr. | Business for Shared Prosperity

Columbia, SC — The South Carolina Small Business Chamber of Commerce has announced its support for three Congressional legislative efforts to help re-energize the small business loan market and protect the small business borrower.

“Relatively very few small business loans are being made today because of overly restrictive lending policies,” said Frank Knapp, Jr., President and CEO of the Small Business Chamber. “The crisis this is creating is not only for small businesses but also for the nation’s economy since most new jobs come from small businesses.”

“Lenders tell me that small businesses must change to obtain loans saying that they must become more credit worthy and have more personal assets,” said Knapp. “But small business didn’t create this economic crisis and tightening lending policy on us only guarantees that the economy will take longer to recover.”

The three Congressional initiatives supported by the Small Business Chamber are:

–Bank On Our Communities Act (S.1822 by Senators Merkley and Boxer). Targets funds to community banks with requirements to increase small business lending.

–Promoting Lending to America’s Small Businesses Act (H.R.3380 by Representatives Kanjorski and Royce). Increases credit union business lending cap to 25% of a credit union’s total assets.

–Consumer Financial Protection Agency (CFPA). Creates an independent federal agency focusing mostly on the largest financial institutions to promote financial product safety, expose unsafe products and services and encourage accountability and fair competition.

The Small Business Chamber joins other business organizations supporting the CFPA and criticizes the U.S. Chamber of Commerce for its comments that the CFPA would choke off credit to small businesses (New York Times, 2-24-10). “Small businesses can’t get loans now because of the crisis caused by the U.S. Chamber big dues paying members,” said Knapp. “The organization has no credibility when it says that it speaks for small businesses.”

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