December 22, 2009

After a public scolding by President Obama, the CEOs of the nation’s largest banks pledged to make more money available to small businesses.

“The industry is committed to making good loans to qualified borrowers. We will continue to be aggressive and creative and make every good loan that is possible,” said Elise Brooks, a spokesperson for the Financial Services Roundtable, a member organization of leading banks and financial institutions. 

Beth Zimmerman of Cerebellas LLC, a business-to-business strategy company said,  “There is diminished demand for loans on the part of small businesses and consumers alike. The biggest issue is that small businesses are loathe to borrow for any reason until they see a considerable increase in customers and orders, neither of which are happening to any great degree.”

Bank of America said it would increase lending to small and mid-size businesses by $5 billion next year over what it lent in 2009. JPMorgan Chase announced a similar increase in early November and recently experienced an increase in new applications for loans.

Wells Fargo said in a statement on Monday that it expected to increase lending in 2010 by as much as 25 percent, to more than $16 billion, to firms with $20 million or less in annual revenue.

The banks made their pledge after having repaid the government TARP money. As the economy is recovering, the banking industry has come under fire for not making more money available to both businesses and consumers alike.