Supply Chain

Why Are the Banks Sticking It to Small and Medium-Sized Firms?

Aug. 25, 2011

Over the past several months, I've had the opportunity to meet with dozens of small and medium-sized business owners across America. These are the true job creators and will be the foundation of any economic revival.

Almost to a person they've told me- off the record- that their individual situation with the banks is the one of their most pressing concerns.

Despite the trillions pumped into the banking system over the past three years, many lenders are making it more difficult than ever for these companies to get and keep their credit lines.

Banks are so now risk-adverse that they are calling in loans on long-time clients with flawless payment histories; pulling lines of credit with little or no explanation; jacking up lending fees whenever they want; and, making borrowers jump through more hoops than ever before.

Without access to predictable, affordable commercial credit, America's economy- and the world's- will languish far longer than necessary.

I'd like to hear what all of the presidential candidates and the economists meeting this week in Jackson Hole have to say.

Dishearteningly, however, no one seems ready or able to address this critical issue.

About the Author

Andrew R. Thomas Blog | Associate Professor of Marketing and International Business

Andrew R. Thomas, Ph.D., is associate professor of marketing and international business at the University of Akron; and, a member of the core faculty at the International School of Management in Paris, France.

He is a bestselling business author/editor, whose 23 books include, most recently, American Shale Energy and the Global Economy: Business and Geopolitical Implications of the Fracking Revolution, The Customer Trap: How to Avoid the Biggest Mistake in Business, Global Supply Chain Security, The Final Journey of the Saturn V, and Soft Landing: Airline Industry Strategy, Service and Safety.

His book The Distribution Trap was awarded the Berry-American Marketing Association Prize for the Best Marketing Book of 2010. Another work, Direct Marketing in Action, was a finalist for the same award in 2008.

Andrew is founding editor-in-chief of the Journal of Transportation Security and a regularly featured analyst for media outlets around the world.

He has traveled to and conducted business in 120 countries on all seven continents.