Landrieu, Snowe Address Credit Crunch's Impact on Small Business Lending
Monday, March 30, 2009
Posted by: Oriana Camacho
WASHINGTON – United States Senate Committee on Small Business and Entrepreneurship Chair Mary Landrieu, D-La., today held a hearing entitled “Perspectives from Main Street on Small Business Lending” to look into factors that have caused many entrepreneurs to be shut out of vital credit markets during the nationwide credit crunch. As credit cards and bank lines of credit are becoming more expensive and less available to America’s small business owners – even those with perfect payment histories – the volume of Small Business Administration-backed loans has decreased, and banks that have received bailout assistance are pulling lines of credit and turning down loans to small businesses. The purpose of the hearing was to determine the cause of decreased lending to small businesses.
“A discussion on the difficulty small businesses are having could not come a moment too soon,” Chair Landrieu said. “Restaurants are shutting their doors, stores are going out of business and entrepreneurs are looking to unemployment lines as even some small business owners with the best credit history are having trouble getting loans.
“To provide meaningful lending relief to our small businesses, it is essential that we understand the full extent of the problem,” Chair Landrieu said. “This hearing is ultimately about job retention and job creation. Sadly, since November, 80 percent of the job losses have come from small businesses. While corporate layoffs get the headlines, small business layoffs increase breadlines. Washington must keep dynamic, small businesses at the forefront of our economic conversation. Ten jobs lost here and five jobs there really add up, hurting the economy, our communities and our families. I look forward to working with President Obama and Ranking Member Snowe to get credit flowing to small businesses so they can lead the way toward economic recovery.”
“Our present economic calamity threatens to shutter storefronts all across Main Street America – the very last thing we need at this critical juncture,” said Ranking Member Snowe. “At a time when small businesses should be turning to the safety of government-backed lending, Small Business Administration (SBA) loan volume is in an absolute freefall. The unimpeded flow of credit is the lifeblood of our economy, but as small business credit markets remain frozen, our nation’s enterprises continue to lack the capital they require to maintain and expand their operations. While I am pleased that President Obama unveiled a key initiative Monday for the Treasury Department to purchase $15 billion in securitized SBA 7(a) and 504 loans, this step alone is insufficient and cannot be the end of our efforts to unfreeze our nation’s credit markets. We must respond to the stories shared by our witnesses today, and examine creative solutions that will enable banks to continue offering credit lines to small businesses.”
to read Chair Landrieu's Opening Statement
to read Ranking Member Snowe's Opening Statement
The full hearing is available online at http://sbc.senate.gov/hearings/multimedia/20090319.ram.