More than 40 meetings were held throughout the nation by the Federal Reserve System’s Community Affairs Office to gather information to help the office address the credit needs of small businesses. The meetings revealed four general factors that impacted the supply of small business credit: 1) tighter bank underwriting standards; 2) resource constraints on lending; 3) impact of regulatory guidance; and 4) utilization of alternative funding sources. The most notable credit gaps in the current marketplace include lines of credit and working capital, refinancing credit, small-dollar loans, commercial real estate, patient capital, loans to distressed industries, and start-up capital. Recommendations for potential next steps to address the credit issues were made during a capstone event hosted by the Federal Reserve Board of Governors. New Equity Daily, Editor-in-Chief, Chinwe Onyeagoro, was one of 125 small business finance experts that participated in this forum in Washington, D.C. on July 12th. Among the many notable recommendations was the critical need for small business support services. The participants emphasized that both pre- and post-financing technical assistance is needed to reduce the number of business failures and to support business expansion. In addition, the participants suggested the use of SBA Service Corps of Retired Executives (SCORE) to connect small businesses with each other to facilitate peer mentoring. The participants also made recommendations on regulatory, Small Business Administration, lender, and Community Development Financial Institutions (CDFI)–related issues. For more detailed information on the findings, please click here.
Addressing the financing needs of small business
Published: July 28, 2010Posted in: Articles
My name is Chinwe Onyeagoro and I am the editor of New Equity Daily. Five years ago I started a small business called O-H Community Partners in Chicago and one of the lessons I’ve learned is it’s not enough to simply concentrate on producing a good product or providing quality service or offer the best price. There’s an extra component that is crucial to the survival and growth of our businesses: funding and financing whether we are starting up or trying to maintain our operations or planning to grow. Without adequate funding, small businesses like ours run the risk of stagnating, or even closing. Financing is out there. It’s available. It’s just harder to find.