Echoing the promises of 12 more of the nations largest banks, KeyBank has announced that it will lend over $5 billion to small businesses over the next three years, as part of a nationwide initiative to increase the flow of capital to businesses in need.
Though it did not disclose the level of lending that had been going on before the announcement, they described it as a significant increase in small business lending, something that according to many reports had been flowing much more slowly in the years following the mortgage crisis.
Banks had come under fire for having benefited significantly from taxpayer-funded bailouts following the collapse of several banks, especially as they continued to hand out large bonuses and report profitability, in many cases based largely off the bailouts themselves, which struck many the wrong way, and for good reason. With very little lending going on, despite reports of profitability at many banks, the purpose of the bailouts was going unfulfilled, with very little lending going on for small businesses to benefit from, keeping the economy anemic despite the large amount of capital the banks had acquired.
Thus for many the increased lending is long overdue, and it remains to be seen whether the banks will be able to repair their reputations in any significant way, which will likely take many years if it ever happens at all.
Among the other lenders committed to increasing lending to small business were Bank of America, Wells Fargo, M&T, JP Morgan Chase, PNC and others, in total promising $20 billion between 13 major institutions. To put the money into perspective, the banks had been lending approximately $700 billion before the financial meltdown, and $600 billion subsequently; in other words, $20 billion represents 20% of the problem repaired. Likely to make a significant dent, though the country shouldn’t hold its breath waiting for instant solutions.
KeyBank described its increased lending as maintaining its conservative approach to lending, intending to avoid sub-prime situations and so on. It has taken this approach before, and its continued sober approach should be helpful in maintaining long-term stability both for its own businesses as well as those to whom it chooses to lend.
KeyBank reiterated its view that small businesses are the engines of the economy, which employ a great number of people and are currently facing difficulty for a variety of reasons, and stressed that resolving or mitigating this problem will drive job growth, demand, profitability and other economic factors. Hopefully the increased efforts will pay off soon, as chronic unemployment levels have remained at dangerously high levels, and many are expecting and worried about a double-dip recession. With the current jobs plan making its way through Washington highly unlikely to maintain its present form, and perhaps a challenge to pass in any way, it appears that average citizens can only hope that non-government solutions work out a lot better this time around than they did when they were busy causing a financial meltdown, which people have every reason to expect given the watered-down and still under fire financial reform bill.
![[Valid RSS feed]](http://www.world-class-articles.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed
Print This Article
Add To Favorites
