Cam Fine, president and chief executive of the Independent Community Bankers of America. “One of the reasons many minority banks are struggling is that the local bank, the bank on the corner, is unable to extend credit because their balance sheets are clogged up because they can’t get loans off of their books into the secondary market. This initiative will unclog that market and get credit flowing down Main Street.”
As the flow of credit has dried up during this recession, many small business owners who acted prudently and responsibility have been affected by the reckless behavior of others in that they’ve had loan applications denied and lines of credits reduced or canceled. As a result, SBA guaranteed loans, which are usually about $20 billion a year, will likely be below $10 billion this year.
In addition to eight small business and community bankers, the elected officials in attendance were Landrieu; Sen. Olympia J. Snowe (R. Maine), ranking member of the Senate Small Business Committee; New York Rep. Nydia Velazquez, chair of the House Small Business Committee; and Missouri Rep. Sam Graves, ranking member of the House Small Business Committee.
Although his company is larger than the average minority business, Albert Fuller, chairman and CEO of Integrated Packaging Corp. (No. 30 on the BE Industrial/Service 100 list), says his company has been severely affected by the credit crunch. For the past two years, in fact, it has had to fund most of its capital projects using its own financing and internal cash sources. Integrated is in the process of expanding both of its plants, for which it is putting in about $10 million of capital. Fuller, who attended today’s White House conference, thinks the initiatives announced will remind bankers that lending is a high priority for the Obama administration and that it is watching.
“We’re outside of the SBA realm, but we are applying for loans from some of the larger banks that have received TARP money. This occasion and others like it will be very helpful in making those conversations more fruitful,” said Fuller.
Sterling Crockett, chairman and CEO of Sterling Construction Services Inc., in Baltimore, is one of the few lucky small business owners who hasn’t been hurt by the frozen credit market. Crockett, now in the last two years of the SBA’s 8(a) program, has previously used SBA loans and plans to in the future. He was particularly interested in the provision that eliminates capital gains taxes on private investment in small businesses. “That is very encouraging and helpful because we’re exploring all options; nothing’s off the table,” said Crockett, who also attended the White House event. He’s heartened by today’s news because it will help him expand both the company’s capacity and its reach, enabling him to be fully prepared for any American Recovery & Reinvestment Act of and other contracting opportunities that he hopes will soon come his way.
Joyce Jones contributed to this article.