Forum Post: My Letter on How Wall Street is Killing Small Business and Jobs

Occupy Wall Street and How Banks are Killing Small Businesses and Jobs The Classic Case of One Bank, Student Lenders, Mortgages, the SBA, and the 401K Rip-off

Dear President Obama, How can a small business take advantage of tax incentives to hire, if they cannot get a loan because the banks continue to damage their personal credit. The demand for my business very promising, and, I could hire 20 employees tomorrow, and continue to provide scholarships, mentoring and training to hundreds of young people. My problem was not caused by over spending, but by a greedy bank that refused to turn a line of credit into a long-term SBA banked loan. I was solely dependent on the auto industry for business and prior to it crashing, applied to Detroit Commerce Bank, owned by Capitol Bancorp, to convert a business line of credit to a longer term loan, backed by the SBA or VA. As a Service Disabled Veteran Owned Business, with good credit at the time, I qualified. However, the bank was earning more interest from the line of credit than a longer term loan and refused to cooperate. Today, I cannot get business loans because that same bank has placed a judgment on my credit, making it impossible to get any loans or have any chance to repay them, which is a classic case of how greed becomes destructive and counterproductive to the economy. Small businesses suffer far more by the economic crisis than larger business, because lenders put business credit cards in our personal names, private student lenders made parents reliable for students loans. On top of the student loans, small businesses, like mine, used the equity in our homes to finance our business. The SBA didn’t help because it allowed banks to deny government backed loans due to a problem the banks created. Starting with the crisis, Bank of America and other banks, which put all business credit cards in the name of the owner, continue to lower the credit limit to the amount owned. So, even with a high credit score, small business were denied SBA loans by the banks, based on “Debt to Credit ratio”, a problem they created and where the SBA allowed the unfair practice. In addition to the many credit issues from many corners, Small businesses also have a significantly higher mortgage burden, and used the equity in our homes for operation or expansion. We and our employees lost significant amounts on 401ks, and other retirement accounts which was another Wall Street rip-off. We were faced with no other option but to use home equity and cash in whatever remained of our retirement accounts to get through this crisis. All of this led to an overwhelming burden of debt and now of these lenders are fighting us in the courts, leading to even worse credit and less hope for surviving. The only chance for the banks to get paid would be to help our credit, provide us with loans to expand, hire employees and get back on our feet to help ourselves and the economy. Legislation has to address the real challenges facing smaller businesses in order to create jobs. The SBA must be reformed and stop allowing greedy banks to disapprove government backed loans to small business affected by the crisis. The root effect of deregulation and its outcome on small business owners must be taken into consideration. In addition, those banks that received stimulus help from the government should be prevented from taking small businesses to court and further ruining our hope of recovery. Please contact the President of Michigan Commerce. Mr. President, I am requesting that you, the Senate, Congress, Treasury Department, the SBA, the VA, the FDIC, and others, evaluate the real problems of small business, because we are the job creators. We are too busy surviving to make society or the media aware of our real challenges. Our only hope is that the government overcomes the obstructionism, so we can get back to the business of creating jobs.

Randi Payton Service Disabled Vietnam Veteran