Writing in American Banker Nov. 2, Obama’s former Small Business Administration (SBA) administrator Karen Gordon Mills reported that “Bank lending to small businesses, outside of the emergency government aid programs, has slowed to a trickle and may soon completely freeze.” Mills wrote that a survey from the Federal Reserve (its Senior Loan Officer Opinion Survey on Bank Lending Practices for September) showed that the tightening of credit to small business by banks is “at levels not seen since the 2008 financial crisis.”
Given this situation, “42% of small-business owners anticipate not having enough revenue to survive the fourth quarter this year,” says Mills, citing still another study by a private network of 6 million small businesses. She cites the SBA’s ability to overcome the 2008 credit crash when she was sworn as its administrator in January 2009, by raising SBA guarantee percentages on loans and eliminating the borrower fees. But Mills adds, “The aftermath of the 2008 crisis then was nothing compared to the one we’re facing today.”
