We saved the bankers from falling off the brink with tax payer dollars. For that we got bankers borrowing their monies at 0.25% while charging credit card owners 12% and not risking on small established business. For that we got basic savings accounts paying 0.1%. Just as banks could have thrown us off the brink, we should consider the plight of the small business man that threat to the long term health of our economy and our middle class worker. If banks will not lend, then they have outlived their purpose and the government should get into the commercial lending business (not having to pay profits to bank share holders and obscene salaries to bankers will mitigate losses on bad loans). If the banking cartel got “COMPETITION”, I guarantee the spigot will open; after all we shored up the spigot for those parasites.
JEANNINE AVERSA | 07/12/10 05:41 PM WASHINGTON – Big companies are building up cash and are expected to report strong earnings starting this week. Not so for small businesses that can’t get loans – or hire freely until they do.
The gap helps explain why the economic rebound isn’t stronger and could even stall. Federal Reserve Chairman Ben Bernanke stepped up pressure Monday on banks to break the logjam and lend more to smaller firms, which employ at least half of American workers.
Small business owners are relying on personal credit cards or raiding retirement accounts to stay afloat, the Fed chairman said.
Bernanke and other regulators have urged banks for months to lend more to smaller companies. Lawmakers have complained that small businesses that want loans are having trouble getting them. Banks have countered by saying demand remains weak.
The Fed does have authority to create programs to increase lending, such as providing low-cost loans to banks. But economic conditions would probably have to weaken considerably before the Fed would propose such a move. One such program set up during the 2008 financial crisis was recently closed.
The Fed chief’s latest comments came as legislative efforts to spur small-business lending have languished, and as the recovery has lost momentum. Bernanke spoke at a Fed conference held to explore ways to loosen lending to small companies.
“Making credit accessible to sound small businesses is crucial to our economic recovery,” Bernanke said. “More must be done.”
Some small business leaders say they would hire more if only they had easier access to loans such as this secured business line of credit, as just one example. One of them is Marilyn Landis of Basic Business Concepts Inc. of Pittsburgh, which compiles financial documents for other small businesses.
Landis says she would like to hire one or two more people for her 10-person firm and wants to expand into New England. Yet even though she says she’s never missed a payment, Landis says her line of credit was cut about 18 months ago.
Bernanke Calls Out Banks For Stiffing Small Business In Favor Of Big Firms