President Barack Obama asked banks to help finance small and starting companies last year as experts predict these companies will drive economic recovery. Now, it seems a number of major financial institutions are stepping up to help business formation by offering funds to SMBs in 2010.
BusinessWeek reports that many banks have significantly increased their small and midsized bank lending in the first fiscal quarter of the year. For instance, Bank of America has loaned $19.4 billion to companies with less than $50 million in revenue thus far in 2010.
Another standout is JPMorgan Chase. The bank has already loaned $2.1 billion to all business types with under $20 million in revenue. This represents a 31 percent increase over loans in the first quarter of 2009, reports the source.
Wells Fargo has also made strides in small business lending. The bank doled out $2.9 billion in new loans to small businesses – 18 percent of its goal to lend $16 billion this fiscal year.
Huntington National Bank is not only making more loans to indirectly help the economy, it is also directly reducing unemployment rates in the process. The bank has hired more than 150 new bankers to handle its increased loans.
Hopefully, the loans offered to small and starting companies will create many new jobs. The Small Business Administration says SMBs have created 64 percent of net new jobs in the past 15 years.