Released: March 30, 2009
Los Angeles, CA
The Obama administration announced recently that they would buy up to $15 billion in bank loans to small businesses, and remove borrower fees while guaranteeing a greater percentage of new loans made by the banks with the proceeds of this new chunk of taxpayer money. The largest banks getting federal money will have to report on their progress in lending to small businesses, but that’s only a fraction of the banks that support the small business community across this country.
Gene Siciliano, a Los Angeles-based financial consultant, says SBA loans are typically long-term and low interest loans that greatly benefit small business borrowers. Many small businesses need access to capital right now â€" today â€" to get through the recession that they didn’t cause. Many of these business owners who don’t have established lending relationships are unable to start one now, due in large part to bank reluctance to lend. Others have small loans from their banks that don’t stretch far enough to carry them through this challenging economic period, yet their banks are often unwilling to extend or enlarge their lines of credit.
We hear that small business owners haven’t been forming a line at their banks’ door to borrow more money. This is in all likelihood because the banking industry is seen by some as unwilling to lend. This could be discouraging worthy borrowers from even applying, while conservative loan to collateral ratios and restrictive covenants frequently disqualify otherwise good bank customers.
Siciliano has a suggestion for the folks in Washington writing those checks: Require all banks who sell their SBA loans to the government to notify their small business customers that more money is available to them, with higher federal guarantees, lower costs, and more understanding loan committees. That, says Siciliano, should get the Small Business line for credit forming again.
Gene Siciliano, CMC, CPA, is an author, speaker and part-time CFO who works with CEOs and managers to achieve greater financial success in a dramatically changing economy. As “Your CFO For Rent” and president of Western Management Associates, Siciliano has spent more than 20 years helping his clients build financial strength and shareholder value through applied knowledge and process improvement. His book, “Finance for Non-Financial Managers,” (McGraw-Hill, 2003) is available in bookstores and online. More information and free articles are available at www.GeneSiciliano.com.
Gene Siciliano
President
Western Management Associates
Los Angeles, CA
Phone : 888-788-6534
More Information CFO for Rent
Book Title : Finance for Non-Financial Managers
Courtesy FeaturesUSA.com