Miami Herald Reports Push for Small Business Loans

Karen Mills, the administrator for the Small Business Association (SBA), is receiving praise for increasing lending to small businesses and in particular, credit for the government’s decision to guarantee 90% of loans for businesses that would not normally qualify.

In a Miami Herald interview, Mills said that Banks weren’t lending to small businesses because of two reasons 1) they didn’t have any money, and 2) they didn’t want to take the risk.  They addressed the issue by releasing $30 billion to local and community banks.  Yet it seems contradictory that the government is asking the banks to be more prudent with loans, and yet help small businesses.  To that, she answered that they are encouraging the banks to use the government backed money, so that the loans would be insured, and the risk would be negligible.