Business Loose Out On $10.5 Billion

It should be no surprise that getting a small business loan has been tougher than ever this year.  In fact, a recent report released by the Treasury Department, states that the top 22 bailed out banks that received the most funding from the Troubled Asset Relief Program(TARP), which include CitiGroup, Bank Of America, & AIG, have cut small business loans by $10.5 billion. 

The report covered six months from April of this year through September and saw that the average small business loan totals fell from $269 billion to $259 billion, a shocking 4%. What’s more shocking is that 3 out of the 22 banks, no longer help small businesses with loans, and another 15 have drastically cut the amount of loans they hand. Those changes were made in the 6 months of the survey. [Read more]

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Small Businesses Rely More On Credit Cards Than Loans Due To Economy

Getting a loan for small businesses be quite a challenge, but a recent article from CNN Money suggests more small businesses are applying for credit cards instead, since that’s all that banks will offer right now.  However, running on credit cards alone could be a risky move.

CNN notes that last month JPMorgan Chase had released  four new types of small business credit cards with interest rates reaching up to 30%.   Since then the company has cut other types of small business loans. This year, with loan programs through the Small Business Administration (SBA), JPMorgan Chase has reduced the number of loans they are handing out.  They roughly handed out 1,250 in the SBA fiscal year in 2009 which ended on September 30.  Compare that to 2008, when 6,100 loans were distributed to small businesses.  [Read more]

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House Passes Act For Small Businesses

The House of Representatives approved the Small Business Financing and Investment Act (H.R. 3854) last week which will generate and save more than a million job.  The bill passed 389-32, and will generate more lending opportunities for a small businesses and will also try to help the credit markets, which have been down in the dumps this year with the world economy.  Small businesses across the US generate 60-80% of new jobs each year according to the California Chronicle.

The American Recovery and Reinvestment Act which was also recently pass has guaranteed $9 billion for new small business loans. However the new legislation will help improve the Small Business Administration’s program  allowing $44 billion a year for lending and investments for new and small businesses.  [Read more]

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