Banks have reduced the number of business loans they're offering, reports today's New York Times. The cuts, the article says, are the result of multi-billion dollar losses associated with the mortgage crisis which have forced banks to tighten their collective belts. The take home message? Don't plan on that bank loan.
But are things really that bad? While we're not [typically] inclined to disagree with the Old Gray Lady, this article feels like much ado about very little. We like DealBreaker's take on it:
"This is one of those article they write every six months in some publication. It's about how the next shoe to drop is small business loans, and then they find a few businesses that couldn't get their bridge financing while their factory is getting completed, or something like that. Not that there hasn't been some decline, at least according to the article: collectively, commercial paper and commercial loans fell 3 percent over the last year to $3.27 trillion."
To which we add: $3.27 trillion is still a lot of scratch for businesses who need it.
What do you think?
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Beyond commercial lending, the banks have been downright sneaky with their recent education lending practices. Many students are now being charged a 3% "origination" fee that is taken off the top of their loan value before it is even passed on to the school for payment.
—mjandri
19:22, July 28th, 2008
Honestly, this reminds me of Randy Pausch's Last Lecture:
"But remember, the brick walls are there for a reason. The brick walls are not there to keep us out. The brick walls are there to give us a chance to show how badly we want something. Because the brick walls are there to stop the people who don’t want it badly enough. They’re there to stop the *other* people."
http://en.wikipedia.org/wiki/Randy_Pausch
Or, to paraphrase Journey, "Don't stop! Believin'!"
—Mahesh
15:55, July 28th, 2008
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