Top 25 World Banks

In most recent times these folks have lost nearly $100 billion - do you think they are actively seeking new loans right now? Probably not - if you are a customer tread lightly and bring a solid bit of collateral (not mortgages, sorry) to the table.

It's a goofy lending world out there, but for the folks under $21MM in Revenue at least you have the SBA to consider.

More Detail on the SBA revamp

Though it doesn't affect demand for borrowers products, the new SBA flexibility can help a small business survive these challenging times. More news on the program and it's effects today from the Chicago Tribune.

SBA Loans are Open Again!!

As Melanie Lindner writes in Forbes, the SBA loan market is being freed up by the Obama administration's injection of $15 billion for purchases in the secondary market. This market works like the mortgage market and has been frozen for several months now. By freeing this secondary market banks will have new capacity to originate new loans.

Even better for borrowers, through the end of 2009 the SBA is waving origination fees (not sure about the bankers, I'm sure they'll still want their fees), and upping the percentage the government guarantees from 75% to 90%, making these loans much more attractive to lenders.

So it's now time to go to your banker and ask, what amount and terms can I get now to sustain and grow my business?

The SBA and How This Administration Does Business

I cannot tell you how peeved I am at the SBA. Big supporter up to now as a solid option for small businesses who need capital. Still a supporter, but as a tax payer very mad. This excellent expose by Gretchen Morgenson looks at the recent fraud involved with a big operation active in Michigan which leaves the tax payers with a huge, albeit local, possible loss, reminds me of the days of the Savings and Loan bailout. She describes the nut:

"The S.B.A.’s own Office of Inspector General examined the agency’s oversight of BLX (recently the 2nd largest SBA lender in the country!!). That inquiry preceded the federal investigation of the company in Michigan, which found that BLX’s operation in that state had made $76 million in fraudulent loans. Last year, Patrick Harrington, a former BLX executive, pleaded guilty to fraud. Since then, 35 people not employed by BLX have been indicted and charged with being co-conspirators, Michigan prosecutors said."

Unbelievable, and she makes a case for very lax oversight. And to think I thought the SBA was underfunded - now we see some very badly mismanaged situations. To allow this much fraud to go on, and to not immediately fix it, is outrageous. Fat chance Congress will be impressed with the recent for increased funding.

Senate Restores SBA Funding, Expands Programs to Veterans and for Micro-loans.

Good news has arrived for the small business community. While the Bush Administration has reduced the SBA's operating budget by 30% since 2001 (source INC.com), the Senate has restored more than $100 million in funding for this important source of small business capital.

The Senate Appropriations Committee voted to increase the SBA's core small business programs by 45% over the President's request for 2009. The bill increases funding for Small Business Development Centers by 24%, Women's Business Centers by 13%, microloans to $20 million from zero, contracting assistance by 87%, and veterans outreach programs by 62%.

Full text of this release can be found here.

Bush not a friend to Small Business

The figures from the Bush 2009 budget are stark; despite a solid reputation as a friend to small businesses, the figures say otherwise.

As the budget describes it, discretionary spending from 2001-2009 (the latter year as proposed) increased by an annual average rate of 5.5%, well out-pacing inflation which has averaged 2.7% since 2001, for a total increase of 53.4% over the period.

Meanwhile, the Small Business Administration budget has declined by 3.9% annually, or a full 27.0% over that time. It was the biggest percentage decline of any Agency.

Now, I get the free market and all, big fan, and the Administration's cuts at Labor and the EPA were not a surprise, but where is the love for small business, got to find your success on your own I guess. While the big tuna's like Agriculture continue to increase and bring in big bucks, not to mention the big cahuna Defence, the SBA is on it's own.

This will not change much this year, but stay tuned for what the Dems will do in this final Bush year to set things up for the new guy/gal whoever that might be.