WA Small Businesses Want Big Financial Reforms
Published on Mon, Feb 1, 2010 by Chris ThomasRead More County & State
SEATTLE - More than 130 small businesses in Washington are part of a
national survey about what the government should be doing to help them
survive and create jobs. In the past year, 86 percent of the Washington
respondents reported lost sales, and 84 percent said they support the
idea of a new Consumer Financial Protection Agency. Many cited examples
of how they've been poorly treated by banks.
Jud Crane participated in the survey. When business slumped at his Seattle restaurant, he says his lender shortened the payback period on his loan, required a lump sum payment of 40 percent, and asked that he move his family's personal accounts to that bank.
"We felt these tactics were beyond extreme - we've never made a late payment, we never defaulted. We were somewhat confused as to what the bank's responsibility to the local economy and the community was."
Crane closed the restaurant this month, putting ten people out of work. Only six percent of the survey respondents said they'd like to see less government involvement in the financial industry, while 87 percent said they want Congress to pass stronger financial reforms.
In his State of the Union address, President Obama suggested using $30 billion of bailout money repaid by the banks to fund more loans for small companies. Dante Montoya, a tax consultant in Kennewick, thinks the real need in the system is greater oversight of the banks' business practices.
"The banks have already got a lot of money, and they're not lending that money. They're using it to shore up their balance sheet or recover their losses, or pay giant salaries, or pay dividends out. There has to be some overview and some commitment that they do lend, at reasonable terms, to small businesses."
Montoya says small, service-related businesses often have good cash flow and motivated owners. The survey found in the past year, 23 percent of the Washington-based businesses had been turned down by a past lender, 22 percent by a new lender, and that 45 percent are using personal savings or a credit card for items they would normally pay for with a business loan.
More than 1,200 businesses in 13 states were part of the survey by the Main Street Alliance. It can be viewed online at www.mainstreetalliance.org/publications.
Jud Crane participated in the survey. When business slumped at his Seattle restaurant, he says his lender shortened the payback period on his loan, required a lump sum payment of 40 percent, and asked that he move his family's personal accounts to that bank.
"We felt these tactics were beyond extreme - we've never made a late payment, we never defaulted. We were somewhat confused as to what the bank's responsibility to the local economy and the community was."
Crane closed the restaurant this month, putting ten people out of work. Only six percent of the survey respondents said they'd like to see less government involvement in the financial industry, while 87 percent said they want Congress to pass stronger financial reforms.
In his State of the Union address, President Obama suggested using $30 billion of bailout money repaid by the banks to fund more loans for small companies. Dante Montoya, a tax consultant in Kennewick, thinks the real need in the system is greater oversight of the banks' business practices.
"The banks have already got a lot of money, and they're not lending that money. They're using it to shore up their balance sheet or recover their losses, or pay giant salaries, or pay dividends out. There has to be some overview and some commitment that they do lend, at reasonable terms, to small businesses."
Montoya says small, service-related businesses often have good cash flow and motivated owners. The survey found in the past year, 23 percent of the Washington-based businesses had been turned down by a past lender, 22 percent by a new lender, and that 45 percent are using personal savings or a credit card for items they would normally pay for with a business loan.
More than 1,200 businesses in 13 states were part of the survey by the Main Street Alliance. It can be viewed online at www.mainstreetalliance.org/publications.
