At President Obama’s meeting with bank CEOs last week, he encouraged them to take a “third and fourth” look at small businesses that had previously been rejected for loans.
US Bancorp CEO Richard Davis said that his bank would be willing to take a second look at every loan it rejects and, as chairman of the Financial Services Roundtable, said he would present the idea to executives at other large banks.
But as John Tozzi points out on BusinessWeek.com , US Bancorp has been taking an automatic “second look” at rejected loans for quite some time.
US Bancorp spokesman Steve Dale told Tozzi that the bank looks for a way to adjust the loan conditions, but now, he said, “We’re going to try harder to say yes and we’re going to look for more ways to say yes.”
US Bancorp gets about 40,000 applications for small business loans each month, and Dale told Business Week the bank’s approval rate is between 40 and 50 percent.
Bank of America, Wells Fargo and American Express also said they have had second-look programs in place for a year or longer, according to the Wall Street Journal.
The banks told the Journal they’ve recently taken steps to ramp up the second-look process, including hiring new staff, widening application criteria and formalizing appeals programs. Bank of America pledged to increase small-business lending by $5 billion next year.
This article was submitted by Katie Kapler, Director of Online Strategy for Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to email@example.com