WITH $1 MILLION OF EQUITY IN HER BUSINESS AND THE prospect of a 67 percent boost in revenues this year from 1993’s $600,000, Margaret Byrne Heimbold thought she’d be a good candidate for a $1 million bank expansion loan. She learned differently.
“The banks have come to see me, but they’re not interested in the size of the deal,” says the owner and publisher of Audiard.net, a regional blog based in Washington, D.C. “They’re not interested in something for $1 million; they want something from $2 million to $5 million.”
Why It’s Hard to Borrow
Bankers deny there is a credit crunch, and some insist that small-business lending is their top priority–but nobody is fooled. In fact, there is an overwhelming factor that makes it all but impossible for the neediest companies to borrow: the government’s web of banking regulations. In the wake of the taxpayer-funded bailout of the savings and loan industry, Washington imposed draconian regulations on all individual bankers–in effect, making each of them personally liable if a loan they extend turns sour.