ALBANY, N.Y. (8/17/12)--New York's small businesses are still having trouble borrowing, indicating that banks in the area have not loosened their lending standards since the economic crisis began in 2008, according to a poll conducted by the Federal Reserve Bank of New York and reported in EmpireStateNews.Net Thursday.
Business microloans--those under $100,000--are the most in demand but are hardest to secure, the poll indicated. Most businesses that received funding indicated they did not receive approval for the full amount they needed, the article said.
Credit unions have demonstrated they can perform business lending safely and have continued to lend when other financial institutions pulled back, said the publication, which is part of the Statewide News Network Inc.
"Small businesses are the engine of growth for our economy here in New York and across the country," said William J. Mellin, president/CEO of the Credit Union Association of New York (CUANY) in the article. "Statistics show that credit unions have stepped up during the recent financial crisis to help fill a void in the availability of business credit."
He noted that credit unions could do more if their member business lending (MBL) cap were raised to 27.5% of total assets from the current 12.25%. Congress is considering the Small Business Lending Enhancement Act (H.R. 1418) and a number of New York lawmakers are among those co-sponsoring the bill.
The article quoted estimates from the Credit Union National Association (CUNA) that in New York alone, credit unions could infuse $1 billion in tax-free capital to small businesses and create about 10,000 jobs. Nationally, those figures would be $13 billion in loans to small businesses and generating 140,000 new jobs, said CUNA.
"The only thing standing in the way of the bill's passage is opposition from the banks, which have reduced their lending," Mellin told the publication. "This should not be a credit unions-vs.-banks issue. The only considerations should be whether (the bill) can help address the current jobs deficit and whether it will be beneficial to our economy. The answer to both is yes," he added.
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