Will the Community Bank Crunch Squeeze Small Business? How to Find Out | Network Solutions Small Business Resources

SmallBiz Refresh: : Will the Community Bank Crunch Squeeze Small Business? How to Find Out

By Maria Valdez Haubrich If your small business has received loans or lines of credit from a community bank—or was hoping to do so—you might find it becoming more difficult. Inc . recently reported on a coming crunch that is hitting community banks, with possible ill effects for small business owners who depend on those banks for capital. The problems stem from the Troubled Asset Relief Program (TARP) which gave banks nationwide funds from the U.S. Department of the Treasury that had to be paid back with interest. While Inc. reports that the nation’s larger banks have already paid back their TARP debt, about 300 community banks across the country haven’t yet done so. The Treasury Department is winding down the TARP program, raising interest rates for banks that still have outstanding debt to pay back. These banks are being hit with a perfect storm: In addition to the need ...

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