WASHINGTON – A report today released by the Federal Reserve found that more than half of America’s banks have tightened lending standards to small businesses. Today, Senator John Kerry (D-Mass.), Chairman of the Committee on Small Business and Entrepreneurship, called for the passage of his legislation to increase lending to small firms by reducing fees.
“The credit crunch has gotten even worse. Over half of our banks have tightened their lending standards, making it harder for small businesses to expand their payrolls and invest in new equipment. The Bush Administration and Republicans in Congress have bailed out Wall Street and done nothing to help small businesses on Main Street,” said Senator Kerry. “Today’s Fed report just underscores the need to pass my legislation to lower fees and stimulate lending for the largest source of new jobs: America’s small businesses.”
The Fed’s quarterly survey can be viewed at: http://www.federalreserve.gov/boarddocs/snloansurvey/200805/fullreport.pdf.
In February, Kerry introduced the Small Business Lending Stimulus Act (S. 2612) to temporarily reduce fees on government-backed loans to small businesses. At a hearing before the Committee on Small Business and Entrepreneurship last month, bankers and small businesses testified that reducing loan fees would be a big help in increasing loans to entrepreneurs. Kerry’s bill would provide nearly $200 million to cut borrower and lender fees in the Small Business Administration’s 7(a) loan program for working capital and the 504 loan program for financing fixed assets. It would also provide $12 million for the microloan program and allow small firms to refinance business debts using the 504 loan program.