Small Banks Say They Can't Win In Small-Business Lending
David Harmer didn’t think he’d have a problem getting a $50,000 line of credit for his 33-year-old air-conditioning business.
First Class of Cape Coral, Fla., was profitable. Harmer’s net worth was $2 million, and he’d never been late with a loan payment.
But Florida Gulf Bank denied his application last summer, saying First Class’ balance sheet didn’t show a profit. Harmer explained he reclassifies company earnings as his wages at year’s end to lower his taxes, a technicality that hadn’t posed a problem for his previous credit lines at other banks.