Wall Street Journal, By: Kelly Spors
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.
...critics of the SBA say the administration hasn't done enough to ensure that business owners who sorely need access to credit right now can get it and are urging for some quick changes.
Sens. John Kerry (D., Mass.) and Charles Schumer (D., N.Y.) sent a letter Monday to Sandy Baruah, the SBA's acting administrator, urging the agency to make a raft of changes to its lending programs to give temporary relief to small businesses seeking financing right now. Among the changes they recommend: granting bridge loans to small businesses through the SBA's disaster-loan program and readjusting the rate cap on 7(a) loans to make them more financially appealing to lenders.
They argue that the bailout package passed by Congress will take too long to trickle down to small companies. "Small businesses can't wait any longer for a lifeboat to arrive," Sen. Kerry says in a statement. "They need help now and the SBA has the power."
To read the rest of the article please click here.