MADISON, Wis. (10/1/12)--While some banks have maintained that there isn't a need for more small business loans and that credit unions shouldn't be given more opportunity to lend to small businesses--the Bank of America is hiring small-business bankers to work with that specific market, a sign that small businesses do need more service--and credit--from financial institutions.
The Charlotte, N.C.-based BofA said last week it will hire 130 small-business bankers throughout Florida to offer guidance for small-business owners. That's in addition to its previous announcement that it would hire about 1,000 small-business bankers nationwide, BofA said in a press release.
"Small businesses are the lifeblood of our local and national economy," said Robb Hilson, Miami-based BofA small-business executive. The comment echoes what credit unions have been saying all along, in their attempts to get more authority to offer small-business loans to help the economy. During the financial crises, many banks cut back business lending, while credit unions made loans to that market.
The bank, in a semi-annual study in May of small-business owners, said that 27% of Miami small business owners considered themselves as very financially savvy, but the remainder admitted they need help. "Small-business owners have complex financial needs that are unique to each industry and business," said Steve Turner, BofA Southeast region sales executive.
Many small-businessowners are challenged when it comes to understanding financial management, said a Florida-based publication, HispanicBusiness.com (Sept. 27), It noted that several other banks and credit unions also offer specialized service to small-business owners.
BofA's announcement comes amid bankers opposition to credit unions' push to get Congress to pass the Small Business Lending Enhancement Act, which would increase credit unions' member business lending (MBL) cap to 27.5% of assets, up from the current 12.25%.
Small businesses are struggling to get credit, and the Credit Union National Association (CUNA) estimates that raising the cap would mean small businesses could get $13 billion in additional loans that would help create more than 100,000 jobs, at no expense to the taxpayer.