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Business Loans Still Sluggish The House Committee on Small Business today held a hearing on the state of credit for the small business community. Chairwoman Nydia M. Velázquez, a congressional Democrat from New York, stated that despite stimulus funds and loosened rules for U.S. Small Business Administration-backed loans, credit for Main Street business is still moving slow."From the start-up in Silicon Valley to the mom and pop restaurant on Main Street, small businesses everywhere are struggling to find the capital they need to keep their doors open," Velázquez states. "While the Recovery Act took important steps to help fix the credit markets, entrepreneurs still can't find the loans they will need to get the economy moving forward again." Her office states that, despite more liberal guidelines for lending, loans backed under the SBA's most popular program, called 7(a), are lagging $5 billion below last year's levels. She states that the agency has been slow to implement new congressional mandates and that there will be likely be additional oversight by lawmakers. "Eight years of inept management and underfunding have come home to roost at the SBA, preventing the agency from stepping up when we need it the most," Velázquez said.
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| Posted under: Ideas, Money, Small Biz News, Startup, Stimulus
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It's not all bad news. Credit crunches force entrepreneurs to go back to the basics and raise cash more creatively than just taking their banker to lunch. There are other sources of capital out there that don't involve banks.
Friends, family, business associates, suppliers and happy clients are all powerful sources of ongoing capital.
As a matter of fact, I have seen the infusion of capital from these sources dramatically increase over the past 12 months into businesses I interact with.
Here's why I believe that is happening. Friends, family etc have been burned by the recent Wall Street antics. They are looking for businesses they can believe in, see, touch and have some level of control with. Gone are the days when people put their full faith and nest egg in big corps.
This is an incredible opportunity for small business to step up and tap into the virtually limitless source of private funding out there.
Think about it this way. If your own suppliers, clients, friends and family don't see the value in investing in your company, why should a banker or credit card company?
Authentic brands are having no trouble getting their hands on working capital even today.
http://www.joeabraham.com
We have posted a great video with a panel of entrepreneurs from our program who share some excellent advice on the startup process.
Youtube clip:
http://www.youtube.com/watch?v=Vq8eCMdQaoE
Full video:
http://blogs.mccombs.utexas.edu/mccombs-today/2009/05/as-global-moot-corp-unfolds-alumni-share-start-up-stories-value-of-entrepreneurship-program/
Feel free to send it around. Thanks! Rob Meyer
Rob Meyer
Public Affairs Representative
McCombs School of Business - GSB 5.170A
The University of Texas at Austin
1 University Station, B6000
Austin, TX 78712
(512) 471-6746
http://www.mccombs.utexas.edu/
It's interesting that US Bancorp utilized over $6 billion in taxpayer funded TARP loans but yet I as a small business owner now can't utilize the ARC loan program because my bank, US Bank, won't participate in the program.
I'm beginning to think the FED should refuse the payback of the TARP funds by US Bancorp so that they continue to be overtly regulated until they start playing ball!
Also, I believe TARP banks that aren't participating in these loans should be fined monthly to fund additional ARC loans as well.
Sad news, small business is the backbone of the economy.