Editor’s Note: This is unfortunate that at a time when small businesses need financing the most. I don’t blame the lenders either, we want them to make prudent loans all the time, now we want to make loans to businesses that have a much higher chance of default than before this whole debacle started. Once these plans get into full effect to restore lending, we should see these numbers pick-up only because of the government assistance. I don’t think we will see normal lending without assistance anytime soon.
News:
At a time when small business owners desperately need loans and credit lines to help them weather the recession, some of the industry’s most active lenders have bolted shut the doors to their vaults.
Temecula Valley Bancorp and Capital One Bank have stopped taking applications for new loans through the Small Business Administration’s flagship 7(a) loan program, and Bank of America has slowed its lending volume to a trickle. Small Business Loan Source, a non-bank SBA lender that specialized in commercial real estate financing, is closed to new applications and leaving all new SBA lending activity to its parent company, First Bank in Clayton, Mo.
These four institutions were among the 30 largest SBA lenders in the 2008 fiscal year, accounting for 4% of the program’s loan volume, or $524 million of the $12.8 billion that was lent to nearly 70,000 businesses, according to data compiled by Coleman Publishing, which monitors small business lending trends.
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