Tight Money

An article in today’s Wall Street Journal talks about a fact known by most small business owners – SBA loans have dried up. Anyone who has tried to get a business loan from a bank recently knows that, even if applying for an SBA backed loan, banks have tightened credit-worthiness standards. Today, more than ever, the old saw holds true – you can only borrow money if you don’t need it.

According to the article, banks are having difficulty in selling SBA-backed loans on the secondary market, and the SBA is doing very little to make SBA lending attractive to banks. It is felt that it will take a long time for the billions of dollars going to banks in the “bail out” to trickle down to small business loans.

So, what can the business owner do? Well, for starters, vote today. Make your voice heard. Tell Washington that you want and need change. Beyond that, reduce waste, and look for alternative funding sources like factoring receivables, or non-bank asset-based lending. There is money available, but it will not be easy to get in the near future.

Will Limkemann