The Wall Street Journal reported that Bank of America plans to hire 1,000 new small business bankers in 2010-2011. The new hires will be responsible for bringing in new business by offering help with lending or cash management services.
There are a few lessons here about borrowing and lending:
- Many banks are under intense political pressure to increase lending to small businesses.
- Since small businesses create most of the new jobs in the country, our elected officials believe this is a way to prime the employment pump.
- There is abundant liquidity in the financial system. There is a shortage of qualified borrowers. Government is pushing on the wrong string.
- A bad investment, poor business performance or a weak economy cannot be made better with borrowed money and can be made much worse.
- Idea fairies can cloud the borrower’s judgment. The future always appears much rosier than it turns out to be for many businesses and individuals.
- The average borrower is outgunned and overmatched. You need a borrowing advocate to level the playing field. Consider hiring a professional borrowing coach.
Memories have faded from bank loans gone badly due to flimsy bank underwriting for questionable borrowers. History is being repeated.
What would you tell your congressman or senator if they asked you to lend money to today’s under-qualified borrower?
Oh yeah, you are a lender through taxpayer-funded loans and loan guarantees! Call them today and voice your opinion.
- Small Business Borrowing Boost Paves the Road to Recovery (dailyfinance.com)
- Small Business Borrowing Jumps: Report (huffingtonpost.com)
- Bank of America Extends $25.9 Billion in Loans to Small and Medium-Sized Businesses in Third Quarter of 2010 (eon.businesswire.com)
- BofA to Hire 1,000 Small-Business Bankers (online.wsj.com)
- For small businesses, $30 billion in fresh hope (seattletimes.nwsource.com)