There has been a tremendous amount of talk in the media over the last few years about how small businesses cannot access business credit (loans, lines of credit, working capital advances or business credit cards).
In fact, several small business associations claim that 41 percent of small businesses cannot access business credit or business capital.
I say they are wrong. What they are actually saying is that they cannot access business credit on the terms they want or in the form they desire.
Clearly, getting a business loan in 2004 through early 2008 was a lot easier than it is now. But, what really happened was that business loan underwriting standards where drop or lessened – allowing individuals and business owners, many of who should not have gotten credit in the first place, to obtain risky loans – loans that were not repaid and could have never been repaid; very similar to what mortgage banks and mortgage brokers did with home loans.