Despite Credit Crunch, Small Business Lending Still Alive and Kicking

The SEC is holding some interesting panel discussions regarding small businesses and capital, and securities regulation and smaller public companies, going on live right now.  Webcast is available here.

On this morning's panel I heard one of the best descriptions of the credit crunch as it applies to small businesses. Andrew Sherman, a partner at Dickstein Shapiro LLP in DC, said regarding small business access to capital that "the patient is sick, the patient is ugly, but the patient is not dead."

Despite all the turmoil in the recent weeks, and the failure of the bailout plan (so far) to stop the bleeding, the initial assessment that I wrote about back in early October seems to hold true: lending standards have certainly tightened, but money is out there if you know where to look.

Another panelist, David Bochnowski, CEO of Peoples Bank SB in Munster, Indiana, reinforced that assessment.  He said: "There is not a credit crisis from the standpoint of community banks.  We have money to lend."

He said that their level of commercial lending has not gone down--not because economic activity isn't down (it certainly is), but because small businesses are migrating from the big banks to the community banks.  Expect that trend to continue.