Local small-business owners and bankers hope a new plan from the Obama administration will jump-start credit markets for entrepreneurs.
Bankers in the state point to statistics showing they are lending as much as ever, although they admit their standards are tighter and borrowers less creditworthy than in the past.
Last year, commercial lending by banks was flat nationwide but rose by 11.7 percent in Colorado, said Don Childears, president and chief executive of the Colorado Bankers Association.
“We have been lending like crazy in this state,” Childears said, acknowledging that public perceptions are otherwise.
Small-business owners report having a hard time getting loans, and Small Business Administration loan volumes are down significantly.
Tom Pernell and his business partner struggled to borrow $80,000 for supplies and equipment to open an Aveda salon at 131 Broadway.
After being turned down by two big banks despite a high credit score and collateral, the two used personal savings to meet a strict deadline.
“From the time I bought my first house in 1978 to now, I have never gone in a bank and been told no for anything,” Pernell said.
Childears said lifting the SBA guarantee on small-business loans to 90 percent from 85 percent may allow some bankers to extend credit.
But the bigger benefit could come from the $15 billion the Treasury Department will provide to purchase SBA loans on the secondary market.
In fiscal 2007, the SBA saw a record year with nearly 100,000 loans approved worth $20.6 billion, the fifth straight year a record was set. By 2008, the number dropped 30 percent and the volume fell to $17.96 billion.
Local SBA officials report the state had a similar trend, with fewer loans being made and the average loan size growing.
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
