Does small biz lending need more help?
TEXT OF STORY
Steve Chiotakis: In its economic stimulus package earlier, Congress allocated $730 million to help small business. The government's used that money to jump-start bank lending backed by the Small Business Administration, the SBA as we know it. At a hearing this morning, lawmakers will assess how it's working. From the Entrepreneurship Desk at Oregon Public Broadcasting, here's Marketplace's Mitchell Hartman.
Mitchell Hartman: After small-business lending ground to a halt with the financial crisis, SBA used the stimulus money to increase loan guarantees and reduce banking fees. Analyst Bob Coleman says it's worked, to a degree.
BOB COLEMAN: We're up 50 percent since the stimulus was passed in February.
The problem is, that hasn't been enough to restore lending to pre-recession levels. Right now, SBA loans are running 35 percent behind what they were this time last year.
Coleman says Congress hasn't put enough into small-business lending.
COLEMAN: Seven-hundred-thirty-million dollars is a drop in the bucket. Entrepreneurs simply don't have access to the capital that they had at this time last year.
Amy Graves is one of the lucky ones.
GRAVES: We borrowed $340,000. We got an excellent interest rate, prime plus 2 percent.
Graves and her business partner, Jennifer Morrow, recently got an SBA loan for a new veterinary lab in Kentucky. They just tallied their revenues for the first month.
GRAVES: And we're running at about a third of what we need. We don't sleep as well as we used to, that's for sure.
Soon, other business owners might not be sleeping well, either. Without more funding, SBA loan programs could run dry by December.
I'm Mitchell Hartman for Marketplace.