Small business loans drying up
For all the talk of small business being the real job creation engine of the country, little more than lip-service has been paid to helping small-business owners with that vital task in these troubled times. The big-money bailouts and stimulus funds have ended up mostly in the hands of big businesses, which have all set about disproving most theories of trickle-down economics by reaping profits and not generating a lot of new jobs or enriching suppliers in the process. Banks, also beneficiaries of government largesse on a broad scale, have also been remarkably stingy with loans and other support for small businesses.
Now, one of the critical mechanisms left for small-business funding outside the private sector is also running into trouble: the Small Business Administration's allocation of stimulus funding for backing small business loans has run out, and the loans are starting to dry up. Bankers already concerned about lending out capital who were assuaged by SBA guarantees aren't keeping up the pace to get small businesses off the ground. In an economy with an increasingly gloomy jobs picture, this state of affairs is not likely to offer any near-term improvement.