The number of microloans given to businesses by U.S. banks rose 45 percent in the 2001-02 fiscal year, according to a report by the U.S. Small Business Administration’s Office of Advocacy.
But the report said much of the increase was attributable to promotions or the use of small-business credit cards as opposed to other small-business lending, which showed only a moderate increase during the period.
“It’s critical that small firms know how banks are meeting their credit needs and which banks are investing in small business,” said Thomas Sullivan, the SBA’s chief counsel for advocacy. He said the report is a tool that small businesses can use when shopping for loans.
While the smallest business loans rose 45 percent, the number of loans between $100,000 and $250,000 increased 8.8 percent. Loans between $250,000 and $1 million rose 9.8 percent.
Designed to assist small businesses’ search for capital, the report analyzes bank lending patterns across the United States and across commercial bank sizes.
Banks are ranked based upon their small-business and microloan activity.
Legislative slump
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Small business failed to secure passage of any of the major legislative pieces it sought in Congress this term, according to the Democratic members of the House Small Business Committee.
“There is no dispute about how nothing got done for small business,” said U.S. Rep. Nydia Velazquez, (D-N.Y.), a ranking member of the committee. She said that Congress failed to approve legislative proposals that would have helped small business provide health care, pensions and training for their employees.
In addition, Democratic members of the committee said Congress failed to adopt any legislation that would have helped small businesses more easily access capital.
She noted that Congress even failed to reauthorize the Small Business Administration, despite bipartisan backing the bill received from the House Small Business Committee.
Web scam alleged
The Federal Trade Commission last week charged Expixtar Corp., of Miami, and its subsidiaries, including SBA Online Inc., a so-called Web cramming operation, with billing small-business owners thousands of dollars for supposedly “free” Internet services.
Cramming refers to a practice of billing consumers or businesses for services that were never authorized and have little value. The charges usually appear on telephone bills.
The U.S. District Court for the Southern District of New York issued a temporary restraining order blocking the firm from soliciting other businesses.
Many businesses were hurt by Expixtar despite a warning by the SBA in March, according to the FTC.