Among the more damaging consequences of the financial meltdown in 2007-2008 was the deep freeze in credit for small businesses. Lack of credit forced many small businesses to shut their doors, while others curtailed their plans for hiring or investment.
While the availability of credit has improved greatly for many small businesses, smaller businesses--those with fewer than 50 workers--are still at risk of being left behind. These smaller businesses account for nearly 1 in 3 private-sector jobs in America, yet they are much less likely to be able to get the credit they need to stay in business or grow.
In PPI's latest policy memo, "The Credit Gap: Easing the Squeeze on the Smallest Businesses," Brian Martin offers up a simple solution for providing smaller firms with greater access to credit: allowing credit unions to offer more small business loans. Martin's memo argues for raising an outdated and arbitrary cap on the amount of small business lending that credit unions can currently do.
This idea is virtually cost-free, enjoys bipartisan support and would help an under-served segment of small businesses that fully deserve more credit for their contributions to American job growth.
I hope you'll take a look.
Download the memo.
President, Progressive Policy Institute