Bank Bailouts Didn’t Help Small Businesses

By on

Bloomberg Businessweek reports on a new Small Business Administration study that reveals banks propped up by taxpayer cash were more takers than givers…

Small business loans outstanding dropped 18 percent, from a peak of $659 billion in 2008 to $543 billion in 2011, according to Cole’s analysis. TARP banks cut their lending to small businesses by 21 percent in that period, compared to a 14 percent drop at other banks, according to the paper.

The U.S. Treasury invested more than $200 billion in 700 banks through the bailout program, including $25 billion each to the nation’s largest lenders, including Wells Fargo (WFC), JPMorgan Chase (JPM), Citi (C), and Bank of America (BAC). Citi and BofA received other aid as well. Treasury has noted that its TARP repayments have turned a profit for taxpayers. A Treasury spokeswoman did not respond to an e-mail seeking comment.

Yes: Banks that didn’t get a bailout have actually lent more money to small businesses in the past four years than banks that did.

Sign up for our free newsletter

Like this article? Sign up for our newsletter and we'll send you a regular digest of our newest stories, full of money saving tips and advice, free! We'll also email you a PDF of Stacy Johnson's "205 Ways to Save Money" as soon as you've subscribed. It's full of great tips that'll help you save a ton of extra cash. It doesn't cost a dime, so why wait? Click here to sign up now.

Check out our hottest deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,162 more deals!

Comments & discussion

We welcome your opinions, but let’s keep it civil. Like many businesses, we reserve the right to refuse service to anyone. In our case, that means those who communicate by name-calling, racism, using words designed to hurt others or generally acting like an uninformed bully. Also, comments that include links to email addresses or commercial websites typically aren't posted. This isn't a place to advertise your business.