Oct. 28, 2008 at 10:26am

ABA calls for more small business credit

The American Bankers Association today urged Congress to exercise care when seeking solutions to the current financial turmoil, so as not to enact policies or regulations that will unintentionally restrict the availability of credit, particularly for small businesses.

"The focus on credit to small businesses is particularly important, as they are drivers of new ideas, new employment and new economic growth," said  Stephen Wilson, CEO of LCNB National Bank and incoming chairman of ABA's Government Relations Council at the House Small Business Committee hearing. He noted that even though the demand for lending has fallen recently, banks are continuing to make loans to small businesses. "For banks like mine, small businesses are our bread and butter, and banks throughout our country continue to make these loans. It is vital to keep this economic activity moving as the economic situation moves toward resolution."
 
Noting that SBA's flagship 7(a) loan guarantee program declined in volume by 30 percent last year, Wilson suggested that Congress could reverse this trend by reducing program fees, making the application process easier and cheaper for small businesses and banks, and temporarily increasing the federal guarantee provided on SBA loans. 

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