“The nation’s most pressing economic problem is creating jobs,” said Robert G. Wilmers, M&T Bank Chairman and CEO, at a three-day America East Conference for Small Business Administration lenders in Buffalo, New York.
Wilmers said the solution is to restore the public’s faith in banks and bankers, and loan more money to small business.
The country has lost about 7 million jobs since the financial crisis has begun, and there are 25 million Americans who are currently unemployed or marginally unemployed.
Small business, Wilmers said, has long been the catalyst for job creation in America. But that engine has ground to halt. He mentioned a study by MIT that 67 percent of new jobs from 1969 to 1976 were created by companies with 20 or fewer employees. In 2010, firms with 50 employees or fewer accounted for just 3 percent of net job creation.
“When it comes to the all-important business of job creation, the small business engine is slowing down; it’s slowing way down. In fact, it has slowed down so much that it has just about stopped,” Wilmers told Buffalo News. “These numbers must not — must not — decline further. Indeed, we must reverse the trend in order to continue our recovery from the financial crisis of the past few years.”
The answer to revving up this engine back up again?
Giving the engine the right fuel: business loans and small business financing. Banks need to loosen terms, establish trust with the business owner, and lend money again. When that happens, business owners can feel confident again in hiring.
“A bank that refuses to lend money is like a factory that refuses to produce goods. Neither will survive for long. But the perception is out there that banks are not lending money,” Wilmers said.
“Helping small-business owners receive the capital they need to open their doors, build inventory and hire workers is how banks and the SBA can come together to solve the most important economic challenge of the day.”
After all that’s happened over the last few years, Wilmers said banks can’t assume small business owners are going to reach out to them. Many feel shunned by the banks. Lenders, he said, are the ones who now need to reach out.
Lendio’s Response | Small Business Financing
From what we’ve seen at Lendio, banks are lending, and there’s a lot of demand from borrowers. Our customers have requested more than $2 billion since March.
That’s a lot of demand.
And we have many partnerships with lenders that have a lot of money set aside to lend to the right borrower. The issue nationwide is qualified borrowers and lending institutions are having a hard time finding each other. Banks are worried about poor borrowers and borrowers don’t think they have a chance with the bank. Each lender has a different set of qualifications to approve a loan. Each business owner has a different situation, a different credit rating, revenue, business plan, etc. Finding the right small business financing to fit your needs can be a cumbersome process.
Not every business owner is the right fit with every lender.
In a shameless plug, that’s where we come in. We’re helping the right lenders find the right borrowers and vice versa. Just last week we guided a business owner to Cardinal Bank, where they were approved for a $150,000 term loan.
The more times the right business owner can find the right loan and the right lender for their situation, the more business loans will be approved. And with more small business financing more small businesses will be able to hire more employees, and the sooner this happens, the sooner our economy can turn around.
See what Business Loans Are Right For You
Create a Free Lendio Account