Small biz, banks may spurn Obama's $30 bln program

[cowcommander]

Source: AP

NEW YORK – President Barack Obama's $30 billion small community business lending program faces one big challenge: many of the community banks and businesses it's supposed to help don't want it.

The lending program is part of a bill that passed the House of Representatives on Thursday and now awaits the president's signature. The legislation contains a mix of tax cuts and credits aimed at helping small businesses. The centerpiece of the bill is an effort to make billions of dollars available to community banks for loans to small businesses. It seems like a simple effort to unclog a credit pipeline that has been blocked since the financial meltdown two years ago. But interviews with seven community bankers, as well as small business owners, show a reluctance to participate.

"People in my constituency can't get credit, and this will get money out to small businesses, who are the engine of job creation for this country," said Republican Sen. George LeMieux of Florida, who co-authored the amendment that created the lending program.

Bank executives say their customers don't want loans, even at low interest rates, because the sluggish economy has chilled expansion plans. Some say the federal money isn't worth it because they fear it will come with too much regulatory oversight.



Read more: http://news.yahoo.com/s/ap/us_small_business_lending_pushback

[tularetom]

1. We should just GIVE 'em the money, no questions asked?

Too much regulatory oversight my ass.

No regulatory oversight is what got us into this mess in the first place.

[msongs]

2. invest it in schools, not republican right wing chamber of commerce hacks nt

[xchrom]

3. I'd like to see some real numbers of bankers

Who say they don't want this -- and those who 'do'.

I'm skeptical there's a bunch who will turn it Dow.

I think the problem now is far fewer businesses credit ratings
Are going to pass muster.

[boomerbust]

4. Of course

He is a "Black" president after all.

[Historic NY]

5. Banks can't make much money with fees.

[nevergiveup]

6. If this story is from AP via Yahoo news

it must be true. :eyes:

[EC]

7. So he's saying companies won't borrow because it's

ridiculous to expand without any customers? Rather the demand side is dead...both with borrowers and buyers...

[EFerrari]

8. Nobody wants to be the one to take the first risk.

Although, there are a lot of people trying to start businesses because there are still no jobs. Maybe they'd be further ahead to give it to SBA for microloans.

[matt819]

9. I can tell you this

My local community bank - my bank - was very supportive of small business until, beginning about 18 months ago, it wasn't. When it comes to SBA loan guarantees, they are known among other local banks and small businesses as the bank of no. Notwithstanding the guarantees, they simply do not want to add small business loans to their portfolio. Other banks go through the motions, but it you're not already a customer of the bank, they want nothing to do with you.

I'll bet a dollar to a donut that the businesses that do get access to these funds are not in fact small but rather the huge businesses that the republicans have managed to rename small so that their corporate sponsors can benefit, often to the exclusion of genuine small businesses.

So, is program bogus? Probably not. Will it actually benefit genuine small businesses? Not a prayer.