Still the naysayers on lending crisis

Still the naysayers on lending crisis

In the run up to the vote in the U.S. Senate on the Small Business Jobs Act that included a $30 billion small business lending fund to help address the complete collapse of lending to small businesses, opponents began claiming that small businesses were no long looking for loans. The economy–according to the naysayers like the U.S. Chamber and its lapdog, the NFIB–had scared small businesses from wanting to take on any debt.

Even today after the Jobs Act has been signed into law and the loan fund regulations are being finalized; there are still deniers of a small business lending crisis even by some who should know better.

Russell Colombo, president and CEO of the Bank of Martin in California, recently told a reporter that there is plenty of capital available to make small business loans but there is no demand.

Well, enough of partisan-tainted opinion. Here is the reality.

Last week the New York Federal Reserve Bank released the results of a survey that clearly demonstrated that access to capital is an important issue for small business with 59% of respondents had applied for credit during the first half of 2010.

Of the small businesses trying to get a loan or line of credit only half were successful and 75% of all respondents said that they received only “some” or “none” of the credit they were looking for.

This week Small Business California in a press told of a survey of their members that generated “over 150 comments regarding the problems they are having with banks, especially the big banks.” Scott Hauge, president of the organization, stated that “small businesses are seeing their lines of credit pulled, their loans pulled, interest rates on credit cards spiraling upwards of 30% and extending the time of clearing deposit checks.”

Our banker, Mr. Colombo, needs to get out of his executive office more often and visit the real world of small business.