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Small Firms Would Hire You If Only They Could Get Loans |
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| Small Firms Would Hire You If Only They Could Get Loans |
| Tuesday, March 16,2010 03:11 AM |
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Capital is the oxygen that a small business needs to survive and thrive, yet across the country, the air's pretty thin, as business owners from coast to coast complain of huge hurdles to getting badly needed loans.
Jim Collins, co-owner with his wife Arlene of Quantum Energy Solutions, has been in business in Sacramento, Calif., since 1974. He has a $50,000 line of credit, backed by the U.S. Small Business Administration, through US Bank, owned by US Bancorp. He has a solid credit history and $30,000 in untapped credit.
Yet when Collins approached the bank about borrowing at least $500,000 to expand his 12-employee firm — which retrofits buildings with energy efficient technologies — he was rebuffed, told that his company lacks resources and collateral. US Bancorp declined comment.
Collins, 70, can't get the money he needs to hire five additional workers and ramp up marketing, even as the Obama administration promotes the "green jobs" of the future.
"The credit crunch is still there. It really impedes our ability to grow," he said. "I'd put five more people to work tomorrow."
Lending across the U.S. economy contracted 7.4 percent last year, the biggest such drop since 1942, according to the Federal Deposit Insurance Corp. That means $1.5 trillion in lending evaporated last year, the Treasury Department estimates.
Corporations are issuing bonds again, and large companies have access to bank loans, but it's still an uphill climb for the little guy.
"There's a big gap in access to credit for small firms now, and it's a huge problem," Karen Mills, the head of the Small Business Administration, told McClatchy. "We have a sense that the banks are not back to lending the way that they need to be, going forward."
Small businesses account for 65 percent of U.S. employment, so it's a serious matter that the credit is crunch squeezing these firms.
Read the rest here: http://www.mcclatchydc.com/2010/03/12/90309/too-small-to-succeed-firms-still.html#ixzz0iIzPmjp9
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