State Treasurer Steve Grossman and local state officials met with some local banks and business leaders last week. He was promoting a new program of depositing up to $5 million in a participating bank to be used for loans to small businesses. While the goal of leveraging state deposits for business growth is positive there were mixed reactions about how effectively the money could be used.
Although state money is being deposited with a goal of seeing it loaned to businesses, the banks must still conform to federal banking regulations and all the new oversight. Those regulations make make it tougher for small businesses to meet some of the standards for what is considered a safe loan.
My sense is that many area businesses are finding it easier to get loans and lines of credit when attached to some asset like property, equipment or even accounts receivables. However, many of our small businesses may need to invest in their own businesses with new staff, marketing, training and other intangibles that are harder to borrow against with current banking regulations.
Give the Treasurer credit on this initiative. He is trying to be creative on how to leverage deposits of state dollars. The problem is still an overly cautious regulatory system that makes it hard for banks to help small businesses as much as they would like to.
For more informatioin on the Trasurer's meeting last week you can go to this link on Wicked Local Weymouth. http://www.wickedlocal.com/weymouth/features/x1534027442/Grossman-makes-case-for-small-business-loans#axzz1PA6L8bYU
