Feb 05
Another example of the right hand not knowing what the left hand is doing…
“Bankers: Officials getting in way:
Panel members say examiners making lending difficult”
Feb 05
Feb 05
Seems Titan and Wall Street Journal were echoing each other on Jan 29th with respect to SBA loans. Titan, being what would be considered a small business, is of course more skeptical of the plan from a practical standpoint. As we can see from the WSJ article, both political parties continue to bicker capitulating to “party line” rhetoric in an effort to better position their parties for the next election cycle rather than fixing the problem at hand.
Read the article here: “Surge in Loans Is Unlikely From Small-Business Plan“
Jan 29
SBA 7(a) loans – the most popular of the agency’s loan products – will be capped at $5 million, up from $2 million. Additionally, community banks can tap the TARP facility, which originally aimed to stabilize the larger financial institutions. Banks with less than $1 billion in assets can submit a lending plan that demonstrates how the TARP money will be directed to small businesses. Upon approval, these banks can access capital at a 3% interest rate, down from the 5% interest rate imposed on their larger counterparts.
Does anyone else hear the “let them eat cake” facet of this placebo. Seriously, a whole $30B? Even with leverage – that lending commitment will pale in comparison with just the AIG bailout… for the entire national small business community?Gee….thanks.
The problem is that community banks WILL NOT lend. The regulatory environment is hugely unstable… community banks are expected to pay for the sins of Wall Street. Which I find so ironic…considering that Wall Street doesn’t even have to pay for its own sins. Those banks that are TARP recipients aren’t using capital to lend – they are using it to shore up the unreasonable and fickle demands of their regulators – and use any extra as a hedge against an uncertain future review. But the notion that this goes to help TARP community banks lend? I guess the government ran out of pox infested blankets?
Oh, and by the way, if you have the language – mortgage, finance, lending in your name… you are automatically disqualified from participation with SBA.
I say let the SBA lend directly… they review it all… they approve it all… so why not lend directly?
