MILWAUKEE, Wis. (WTAQ) - Small businesses still find it hard to get the credit they need to grow – and experts say it’s holding up the economic recovery.
Joe Daniels of the Marquette Center for Global and Economic Studies says small companies normally generate the most jobs coming out of a recession. But Rose Oswald Poels of the Wisconsin Bankers Association says the federal government is not giving banks much leeway to work with small business customers.
And U.S. House Republican Paul Ryan of Janesville says regulators are telling banks to stop lending to those considered to be more risky borrowers – namely small businesses.
Joe Fazio, a bank CEO in West Bend, says many banks are over their limits on construction loans, as regulators try to push them toward more balanced portfolios. And small companies which do get loans are paying more for them.
Daniels says the gap between the Federal Reserve’s target rate and the interest charged on commercial loans is just over 4 percent – the largest in 24 years. Ryan says there’s a “disconnect” between federal policymakers and bank examiners in the field – and it has to be fixed.
Small businesses represent over 99 percent of all U.S. companies – and they employ more than half of all private sector workers.