Money for Small Biz: Available or Not?

An article posted today at Minyanville, a popular financial and economic website, discusses the problem of lending to small businesses across the county.   Check out the article.

Mike “Mish”  Shedlock, of famed Mish’s Global Economic Trend Analysis blog and also a registered investment advisor with Sitka Pacific Capital Management , authors the idea that small businesses may not be in the position to borrow due to the economic environment we find ourselves in.  In fact, the thesis is that while we hear the drumbeat from the media about lenders “not lending” the truth of the matter is that debt servicing loads and credit worthiness of borrowers (small business owners) may be more of a factor than what is traditionally reported.

Mike Shedlock provides four reasons banks may be reluctant to approve small business loans and lines of credit:

1) There are no credit-worthy businesses that want to borrow.

2) Consumers are tapped out and do not want to borrow.

3) Banks are scared to death of pending commercial real estate losses, credit card losses, residential real estate losses, home equity lines of credit losses, and losses in general.

4) Asset prices are simply too high (and banks know it) and the securitization market has dried up. (editor note: emphasis added)

Below is a graphic from the article with data provided by the Treasury Department