Monday, December 14, 2009

Congressman Schauer Speaks on the Credit Crisis

How bad is the credit crisis? Pretty bad when you are a small manufacturer armed with a federal contract and you still can't get a loan. We are not talking thousands of jobs on the line at RTD Manufacturing, but this example is indicative of what is happening to smaller businesses who want to create jobs and find they can't get financing - and after awhile, those lost job numbers will really add up.
A local manufacturer with a signed defense contract with the federal government is having difficulty obtaining financing from its bank to buy the materials necessary to do the work.

RTD Manufacturing President Bryant Ramsey wrote in a statement that the contract is to produce a part the U.S. Army needs to keep troops safe in Iraq and Afghanistan.

"It's a sad commentary on the credit situation here in Michigan that small businesses face challenges and delays like this in obtaining funding to buy the materials we need to manufacture our products," Ramsey wrote. "But we're ready to work."

Congressman Schauer took it to the floor of the House last week:

Citizens Bank received $300 million in bailout funds last year. Their response? They claim the loan has not been denied, but "delayed". While they won't speak to this specific loan, they did release this ominous statement:

"We respect the confidentiality of the relationships we have with our clients and will not address any specifics about individual business loans," the statement said. "We review all loan requests thoroughly and take a fiscally responsible approach to lending as a TARP recipient. As hard as we work to find solutions, not all loan requests can be approved."

If you can't get a loan when you have a federal contract, how in the world will other small manufacturers receive funding to start creating jobs? If there are restrictions that are holding Citizens back as a TARP recipient, Congress needs to address those ASAP. We don't want the banks making bad loans - but this is ridiculous.

President Obama leans on the bankers today - we will see if anything changes. If not, job creation and recovery is going to be that much harder to sustain, not just here, but all over the country.