Bernanke: Good Businesses Still Can't Get Loans and Credit

Even Ben S. Bernanke says small businesses are having a hard time getting loans. These are the loans "they need to expand or stay afloat and keep the U.S. economic recovery going".

Bernanke is increasing pressure on banks to expand credit in order to boost growth and employment after banks’ loans to small businesses fell from $710B to $670B from in the past two years. He says that ccreditworthy businesses with strong cash flows and a decline in collateral values are have trouble getting loans.

“Making credit accessible to sound small businesses is crucial to our economic recovery and so should be front and center among our current policy challenges,” “Our message is clear: Consistent with maintaining appropriately prudent standards, lenders should do all they can to meet the needs of creditworthy borrowers.”

“The formation and growth of small businesses depends critically on access to credit,” “Unfortunately, those businesses report that credit conditions remain very difficult.”

According to Bloomberg and Fed data, in June U.S. commercial and industrial loans held by banks have declined to $1.24T from $1.6 trillion at the end of 2008.

Bernanke added: “If you thought housing had declined in value, take a look at what equipment is worth.”

"Many proprietors have had to borrow on their personal credit cards or from retirement accounts".