Wednesday, March 26, 2008

Loans to small businesses decline

These days credit availability is in anybody's mind. A recent NYT article addresses this problem for small businesses. Credit restriction could have severe implications for employment and the economy. The number of business loans has declined in the beginning of this year according to the Small Business Administration.

The NYT article: Small Firms Find Credit is Tightening

The Small Business Administration has not said publicly that it is worried about a credit squeeze even though the number of business loans made through its main program, called 7 (a), has declined so far this fiscal year by more than 15 percent compared with the period last year. And the dollar value of the loans declined by more than 7 percent. The agency guaranteed some $20.6 billion in such loans in the last fiscal year.

According to S.B.A. data, more than $1 billion in 7 (a) loans — the most basic and most used loan type — were delinquent on Dec. 31, 2007, compared with about $673 million a year earlier.

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