The Wall Street Journal reports that credit is getting even tighter for small business:
When entrepreneurs can't get conventional loans, they traditionally turn to loans backed by the Small Business Administration. But in recent months -- as many banks turned away businesses and slashed credit lines -- SBA lending also has dried up substantially. The retrenchment has become especially pronounced in the past couple of weeks.
Although some of this is due to decreasing demand, tightening credit and standards seems to also be behind the steep drop in small business lending.
When corporate America is lining up for help we seem to be ready to bail them out no matter how bad their prospects. But, it seems that at the same time we are turning our backs on small business.
Do you have any data on the approval rate for SBA loans? If so, that would provide more insight. Both types of SBA loans (7a and 504) require the participation of a bank. My guess is that banks are the ones tightening their purse strings and sending in less loans to the SBA for approval.
Small Business Administration loans back.This is an essential fact to be considered.
Tightening credit? Looks like whatever is left of the "free" market is desperately trying to tell something.
This article is very true and now has even affected student loans for those looking to get college aid. They just can't at this time. So more people are being forced to get their GED instead of higher credentials.
My guess is that banks are the ones tightening their purse strings and sending in less loans to the SBA for approval.
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During current recession it is particularly tough to get a good rate or even any loan at all.
I own a weight loss supplements buisness dealing mainly in weight loss pills for women, however most of the suppliers are now drying up due to recession. It seems even dieters are avoiding making purchases at the moment, and loans are just not available here for a good rate in the UK.
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