Addressing the credit crisis on Main Street

By Senator Carl Levin
Tuesday, March 2, 2010

We all know that despite encouraging evidence that our economy is bouncing back, we have a long way to go before it is creating the jobs that provide opportunity for American families. And one of the biggest roadblocks to job creation right now is access to capital for our small businesses.

Too often, businesses that could add jobs don't, and those that want to keep their workers on the payroll can't, because they can't get the bank financing they need.

Sometimes, the banks that these companies have done business with for years suddenly decline to continue the stream of financing that businesses depend on to continue their day-to-day operations.

I hear over and over from small businesses in Michigan - companies at the heart of their local economies - that have been unable to get the financing they need. That's why I'm working to expand access to capital for small businesses.

One way to do that is by strengthening the smaller community banks that haven't gotten as much help during this financial crisis as the big Wall Street financial companies. Often these banks want to lend to businesses that have great credit records and plenty of customers, but aren't able to because their own finances have been weakened by the crisis.

I'm co-sponsoring a bill that would strengthen these banks, and President Obama's administration has proposed a similar effort.

Another problem is that the economic crisis has been so severe that the assets of small businesses - their inventory, buildings and equipment - have gone down in value, just like the value of our own homes has fallen.

The falling value of those assets means these companies have less to put up as collateral for their loans, and banks are therefore more hesitant to lend.

I'm asking my Senate colleagues to learn from the example of some programs in Michigan that shore up business collateral to make financing easier to obtain.

I'm encouraged that many Senators recognize the problem and want to act; just this week, I testified about the problem during a hearing of the Senate Banking Committee's Economic Policy Subcommittee.

But we need to move fast. Every day we fail to act is a day banks aren't lending, small businesses aren't growing, and Americans who could be working aren't.

Thanks to your support, we've made some progress in helping our economy rebound in the last year, but there is so much more to do, and your continued support will help us get the job done.

Sincerely,
Carl Levin

For more information about Sen. Levin, visit:
http://www.berkleydems.org/content/carl-levin