For the past several years I have not had much respect for banks. They essentially stopped lending money to anyone except those who didn't really need it. If you had a small business then you were out of luck. Your banker was unwilling to help.
Of course they told you differently. But the reality was that very few loans were being made.
For a while there was a trend of non-bank lenders becoming more aggressive. Private financing sources were actually doing a few deals that banks wouldn't touch.
Not all of this was the fault of all the banks. The economy was battered and regulators tightened lending standards. Banks had to heal their balance sheets. They had little choice but lend to only "perfect" customers.
Things now appear to be loosening, at least a little bit. Today I met with some bankers who have created lending products that can be obtained by strong (not perfect) customers. This comes on the heels of another banker who told me of the relaxing standards of the SBA.
This appears to be real progress. Not just political maneuvering of the financial system. If I am correct in my assessment, then it may be one of the first signs of economic recovery in the small business sector.
Let's hope I'm right.
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