BA Loans Decline Despite Bank Bailouts

The Obama administration reported yesterday that Small Business Administration loans issued by banks that received bailout funds declined sharply in January, despite the added government support. In part, the administration cited the declining economy as a primary cause for the falloff in loan demand.

The bailout funds were designed to restart the credit markets, however, the money has not yet had the intended effect. Lawmakers have said that they are receiving a growing number of complaints from constituents who cannot get business loans to maintain their operations. Banks are also withdrawing and reducing existing credit lines for businesses, even when the borrowers are current on their obligations, further exacerbating the problem.

The Obama administration will now require monthly reports from the 21 banks that received federal bailout funds to permit better oversight on how the funds are being used. In addition, the Small Business Administration will now purchase up to $15 billion in loans made by smaller banks. The administration will tap TARP funds to make those purchases. The SBA purchases will give the banks the capital they need to make additional SBA loans.

If you’ve experienced difficulty in getting small business loans, Rapid Capital Funding can help. If your US-based business accepts Visa or MasterCard, and generates receipts of $2,500 per month or more in credit and debit transactions, you likely qualify for a merchant cash advance.

A merchant cash advance allows you to tap the power of your future credit card transactions to get the cash you need today. There’s no long application to fill out and no waiting. You can also get as much as 1.5 times the amount of your average monthly receipts. Good credit or bad, it doesn’t matter. A cash advance isn’t based on your creditworthiness, and you don’t have to explain why you need the money.

Contact Rapid Capital Funding today for more information on how a merchant cash advance can help your business thrive in today’s challenging economy.

Photo Credit: Donovan

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