Credit Crunch: Poll Shows Need to Revamp System

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The slowly recovering economy has left too many small business owners in Moore County with weak sales because of decreased customer demand.

And it is difficult for them to hire, grow and jump-start the economy when they have limited access to capital.

But they are not alone.

A new poll shows that 90 percent of small business owners nationwide agree that the availability of credit is a problem, and 60 percent have faced difficulty themselves when trying to obtain loans that would grow their businesses.

The poll also found that 77 percent support providing incentives to community banks to boost their small business lending.

“Lawmakers need to look for smart ways to revamp the credit landscape,” says John Arensmeyer, founder and CEO of Small Business Majority, a nonpartisan small business advocacy organization.

The poll was released last week by Small Business Majority, Main Street Alliance and the American Sustainable Business Council (ASBC).

The Internet survey of 500 small business owners nationwide was conducted between Dec. 8, 2011, and Jan. 4. It has a margin of error of plus or minus 4.4 percent.

“Small businesses create 65 percent of the net new private sector jobs in America,” says David Brodwin, co-founder and board member of ASBC. “Our deregulated, damaged banking system isn’t providing the credit they need, and they are calling for change.”

Kelly Conklin, owner of a small business in New Jersey and a Main Street Alliance leader, believes that small business owners “want action from Congress” to boost the economy.

“Invest in infrastructure to build the foundation for business success,” Conklin says. “Take serious steps to deal with the mortgage crisis and restore consumer purchasing power. That’s what small businesses need.”

Among other things, the poll also found that:

  • Six in 10 small business owners support making loans more accessible by reducing collateral requirements.

  • By a two-to-one margin, small business owners support increasing credit unions’ lending cap from 12.25 percent of assets to 27.5 percent.

  • 57 percent of respondents agree that reducing the principal on underwater mortgages to the current market value would boost consumer spending, helping small businesses regain their vigor through increased profits.

  • 69 percent support committing $50 billion to new and existing infrastructure improvements that would generate jobs, such as making improvements to road, bridge and water systems.

  • 52 percent have turned to credit cards to finance their business.

“Loans that will help small businesses grow and create jobs are harder and harder to come by,” Arensmeyer says.

Poll respondents apparently agree, because 61 percent of them say it is harder now than it was four years ago to get a loan.

There is no doubt that small business owners were hit especially hard by the recession. There is also no doubt that our floundering economy cannot recover until our entrepreneurs do.

The doubt lies with our lawmakers. The question is: Are they listening?

I doubt we’ll find out in an election year. Here’s hoping that I’m wrong.

Contact Ted M. Natt Jr. at tnatt@thepilot.com.

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