Business Owners Ache as CIT Scales Back

Tom Drennen, a 29-year-old businessman, has been paying $5,000 in monthly rent on an empty restaurant space in a strip mall in Newport, Ky., since December after CIT didn't extend him a $500,000 business loan it earlier approved. Mr. Drennen, who was preparing to open a Beef 'o' Brady's neighborhood pub, was two weeks away from closing on his loan last September when a CIT officer called to say the company was putting a freeze on lending and couldn't give him the money.

Banks, borrowers dig in over credit crunch

14 percent of 1,794 owners around the country surveyed by the National Federation of Independent Business reported that loans were harder to get in April than they were in March—the highest percentage since the 1980-82 recession. Making things worse, about two-thirds said rates rose on their credit cards—which many small firms use to finance operations—while 40 percent reported decreased credit limits.

5 tips for securing small business financing

Credit-crunch. Collapse. Too big to fail. Bail-out. For a small business owner looking to invest and grow his or her business, or just to obtain financing to stay afloat in these times, these phrases have meant that there is little money out there for that.

Snipping Credit Lines for Small Businesses

In many cases the businesses whose lines were cut had not missed loan payments. Instead, their credit score or their financials had deteriorated, and credit-line agreements typically give banks the right to change the terms of the line if there is a change in the borrower's financial situation. In this case, the changes in the terms are dramatic. If business owners can't convince Chase of their creditworthiness, they have three options: 1) pay off the balance in full; 2) agree to a conversion of the line of credit into a term loan; or 3) go into default.

U.S. small business loans in arrears stabilize

Delinquent loans at small and medium-sized U.S. businesses showed tentative signs of having peaked in March, according to figures from PayNet Inc, a firm that tracks trends in the commercial lending market.

Small Biz to Washington: About Those Promises…

This Administration needs to get everyone-Treasury, the regulators, and the banks-on the same page with a policy that genuinely frees up credit for small biz. The amount of lending that banks view as prudent business vs. the amount targeted by Treasury must be aligned.

Small Businesses vs. Bailed-Out Banks

As banks pull back on lending and work to cleanse their balance sheets of loans that probably never should have been made, some borrowers are attacking the banks for their own difficulties, filing lawsuits, putting out news releases, holding protests and rallying politicians to their defense.

A $200 Billion Credit-Crunch Buster?

The federal government on Mar. 3 provided some long-awaited answers on how it plans to unlock consumer and small business credit markets, which have been frozen more solid than an icy tundra.

Community Banks Increase Small Business Loans

As the credit freeze continues and the recession deepens, many community banks, generally defined as having less than $10 billion in assets, are reporting an uptick in loans and credit lines to small businesses. At a congressional hearing on small business and the economic recovery earlier this month, economist Paul Merski, of the Independent Community Bankers of America, a Washington (D.C.) trade group, told lawmakers that community banks make 20% of all small-business loans, even though they represent only about 12% of all bank assets. Furthermore, he said that about 50% of all small-business loans under $100,000 are made by community banks.

Fishing for funding

The market for small business loans has become a little more scant in the wake of the national economic crisis, but the lending climate isn't completely frozen for new entrepreneurs.

A Small Bank Juggles Its Roles

Across the U.S., a host of community bankers like him are making daily decisions that affect how the U.S. makes it through this recession and credit crunch. They walk a fine line. Holding to lending standards that are too strict can worsen the local economic toll. Being too lenient can run afoul of newly nervous bank directors and regulators, or endanger the bank's own survival. Add to that the tension of making hard decisions about customers who are also neighbors.

How to Borrow Money in Tough Times

We are living in interesting times, but as small business owners, that does not mean we can suspend what we need to do, reset the game, or choose not to move forward. If we do that, we have lost the game altogether.