A bill intended to help smaller banks make more loans to smaller businesses is about to be voted on by the U.S. Senate. This bill will help create $ 300 billion in available capital to help small businesses. The businessman in the lending business are saying this quick cash advance won’t help create more loans for small business. Companies that lend are saying that smaller businesses with credit-worthy borrowers are just in very short supply.

Source for this article -Not enough good borrowers for small business loans by Personal Money Store

Small company lending
$ 30 billion will be sent to community banks if the new bill within the Senate passes. That money is intended to create $ 300 billion in small company loans. This emergency money is intended to increase the accessible credit for small businesses and create jobs. Only small banks that have less than $ 10 billion in assets would qualify for this money. This bill is supported by both the National Federation of Independent Business and the American Bankers Association.

Smaller businesses lack credit
Many of the banks that are a target for this small business lending bill are saying it will not help. Banks don't want to let individuals with bad credit borrow cash -- that is what caused the problem in the first place. There is a lot of demand for loans, but mostly from borrowers without good credit. Without sales and profitability, companies are very reluctant to take out loans.

Small Businesses facing high defaults
You will find numerous indications throughout the economy that small businesses need more than just credit. Loans that are guaranteed through the Small business Administration are defaulting at a rate of almost a full 7 percent. The Bank of America has reported that twice that numerous loans have been “charged off” - assumed as uncollectable. A credit card firm that specializes in small businesses ended up going into bankruptcy after more than 50 percent of its cards went into default in 2009.