Small Business California Calls on Governor Brown to Convene a Special Meeting With Federal Banking Officials

SAN FRANCISCO--(BUSINESS WIRE)--Small Business California (SBC) is calling on Governor Jerry Brown to host a meeting with banking oversight officials, lenders and the Small Business Administration to get capital to entrepreneurs and small business owners who want to start or expand business within the state.

“For different reasons, small business owners and bank representatives are saying capital accessibility is a problem”

“For different reasons, small business owners and bank representatives are saying capital accessibility is a problem,” says Scott Hauge, President of Small Business California. “Let’s get Governor Brown at the table with Karen Mills, SBA administrator, the FDIC, the California Department of Financial Institutions, the Comptroller of the Currency, the Federal Reserve Bank and bankers to have a frank discussion on how we can increase small business lending in California.”

Nationwide, banks have pared their small business loan portfolios by more than $47 billion since the pre-recession peak in 2007. Loans to small businesses are important because small firms play a vital role in the U.S. economy. Firms with fewer than 500 employees account for about half of private-sector output and employ about half of private-sector workers. In addition, relatively new businesses, most of which are small, generate a large share of new jobs.

Last year, the Federal Reserve Bank held hearings conducted across the U.S. and some commercial banks cited the regulatory environment and examination-related concerns as reasons for reduced credit availability for small businesses. Small business owners expressed the view that banks have been difficult and that banks cited increased examiner scrutiny when refusing to lend to small businesses, especially industries such as construction, real estate and retail services. On the other hand, banks do feel the pressure to lend, but at the same time they are encouraged by regulators to apply strict credit standards. The result is a more restrictive approach to lending.

“Whether it’s the regulatory impact or a need for more simplification and consistency in federal lending and banking programs, let’s talk about it and go from there,” says Hauge. “Anything that improves the ability of entrepreneurs and small business owners to access capital is a leap forward.”

Small Business California is a non-partisan, non-profit small business advocacy group representing the interests of small businesses in California. Its Board of Directors are leading advocates for small businesses and represent thousands of small businesses in every part of the state. More information regarding Small Business California can be found at http://smallbusinesscalifornia.org/.