Business Loose Out On $10.5 Billion
Posted on 18. Nov, 2009 by Entrepreneur Financial in Business Financial News
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.
Total lending by major TARP recipients has fallen as well. The report said that the total average loan fell from $4.35 trillion in April to $4.18 trillion in September. Total loan balances have fell on average 1 percent each month since then, with a $28 billion drop from August to September.
Many experts are saying that the effects of the small business loans are increasing to the rise of unemployment rates. The most recent unemployment rate has hit a 10 year record high of 10.2%.
