|
|
            |
|
PO Box 1212 Tampa, FL 33601 Pinellas Updated November 2024
|
|
RETURN TO NEWS INDEX Southwest Florida small business loans remain difficult to obtain Bernanke and other regulators have urged banks since February to increase their lending to smaller companies. Lawmakers on Capitol Hill have complained that small businesses that want to take out loans are having trouble getting them. Banks have countered by saying demand is weak. Remy Fenelus, owner of Remy's Custom Design tailor shop in south Fort Myers, said he knows lack of demand isn't the only factor because he has been looking for money to expand for months. He said he would like to add employees so that he could bid for large uniform contracts with law enforcement or municipal governments, but can't get funding. "Everywhere I turn, it is a brick wall,†Fenelus said. He said he's even tried government training grants because he expects to train his employees. "I thought I would get support to teach someone a trade, but I just can't get anything,†he said. Bernanke's latest comments come as legislative efforts to jump-start small business lending have languished and the recovery has been losing momentum. He spoke at a Fed conference exploring ways to help boost lending to small companies. "Making credit accessible to sound small businesses is crucial to our economic recovery,†Bernanke said. "More must be done,†he pledged. Small businesses usually help drive job creation during recoveries. They employ roughly half of all Americans and account for about 60 percent of gross job creation, Bernanke said. And newer small businesses, those less than two years old, are especially important. Over the past 20 years, these startup enterprises accounted for roughly one-quarter of gross job creation, even though they employed less than 10 percent of the work force, he added. Money is flowing slowly, in part, because bank regulators are demanding Florida banks increase the ratio of capital to their loan portfolio, said Bill Valenti, president of Florida Gulf Bank. That means they either must raise more money through investment or slow down lending. "It seems like these two elements (The Federal Reserve and regulators) aren't talking to each other,†Valenti said. "The underlying fact is banks only make money when they make loans.†Bruce Schultz, president of Southwest Capital Bank, said Bernanke seems to believe that banks don't want to make loans. "It's like saying we are a restaurant with all this fabulous food, but we don't want to serve it,†Schultz said. "That's just not the case. We have to underwrite these loans very prudently.†Brian Lawrence of Fort Myers has been trying for a year to get startup funding for a training center for home health-care aides and certified nurses' aides. He expected to start the business with about $40,000, but classroom requirements and other costs have pushed that over $100,000. "It's just been rough everywhere we have turned,†Lawrence said. "We are going to have to take a step back and decide what to do, but we are going to keep trying.†The Obama administration in early May sent Congress a proposal to create a $30 billion support program to unfreeze credit for the nation's small businesses. The fund would provide support to small and medium-sized banks with assets under $10 billion to encourage them to increase lending to small businesses. The legislation has yet to pass in the Senate. Meanwhile, many economists predict the rebound will lose strength during the second half of this year. High unemployment, problems getting loans to expand operations and hire and a new caution among consumers are among the reasons. "The overall economy needs to be in a much stronger position,†said David Hall, president of First Community Bank of Southwest Florida. "We have a long way to go before lenders will be making loans at any significant rate.†|
| INTRO | FAQ | RESIDENTIAL | COMMERCIAL | NEWS | RESOURCES | TOOLS | TEAM | CONTACT | CLIENTS LOGIN | PRIVACY | |
|
