Yes, as CNN Money reports, that’s a grim headline. But, the news on the SBA loan front isn’t all bad.
One vote of confidence can be found in the increase in lending after the Stimulus Act was signed. “Comparing the months before and after the February 17 stimulus signing, the SBA reports a 24% jump in the number of 7(a) loans it has backed,” CNN stated.
The article goes on to state that over 400 SBA-approved lenders that had not made a 7(a) loan since September have made an SBA loan since the Stimulus Act was signed.
Although the SBA stats seem weak over the past year or two, the program is making a resurgence as lenders gradually regain some confidence in the market. To read beyond my summary, check out the full article on CNN Money.
No surprise here considering that the banks are just not lending money to viable American Small Businesses. We applied for a $35,000 line of credit, personally guaranteed and co-signed by one of our millionaire partners and was still denied because we have been in business for 5 years without any credit history. We have financed everything ourselves and need capital to continue and take salaries. We have viable products and customers, but that doesn’t matter. Our energy saving and green products are also all MADE IN THE U.S.A., and now we have to close and lay everyone off. More business for our overseas competitor!!
What has happened is that all of the people that qualified for home loans for people with bad credit are now going into default on their loans. In the last 2 years, the entire housing industry has seen major declines in home values due to the huge rise in defaults. Once you can teach yourself that you can handle the responsibility, then you can consider a home loan. In general, currently, banks who are issuing home loans are looking for someone with a credit score above 700.