The Credit Crunch and Small Business

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The Credit Crunch and Small Business (Click on image to read article)

The Credit Crunch and Small Business” by John Tozzi is a relatively current article that accurately and concisely conveys the current state of the credit crunch and its effects on small businesses. According to Dayton bankruptcy and workout attorney John Rieser, “In Ohio, banks are refusing to renew lines of credit and calling in loans made to decades-old family businesses that are current on payments”. Working in the banking industry myself, I can understand where the banks are coming from. It is just so unfortunate that well established family businesses who are keeping their credit products current are losing their hard-earned credit due to the mistakes of the big banks.

The article raises an interesting point. According to the president of Sterling National Bank, John Millman, he sees “the current crisis for banking giants as an opportunity for regional banks like his.” Sterling National Bank deals in small business lending. He goes on to state, “When there’s disruption in the marketplace, that creates opportunity for banks like ours who have lots of liquidity”. The irony of this statement is in the fact that the failure of some of the major American banks, which has forced many small business to close down, has at the same time created lucrative opportunities for smaller entrepreneurial banks such as Sterling. It just goes to show you that the over-used economic statement, “wealth is transferred, not lost” holds true in this case.

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~ by maniebrahimi on June 1, 2009.

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