Wells Fargo is one of the biggest lenders to small businesses and in the home loan modification program. Unemployment seems to have created a domino effect and has left many financially strained, with small businesses hurting as well as homeowners in need of mortgage assistance. Many believe the solution to unemployment, and all the trouble it has caused, as well as a big factor in economic growth is small businesses.
Jobs need to be created for people to afford their homes and, according to many; the best way to create jobs is through small businesses. However, lenders like Wells Fargo are said to be reigning in on small business loans due to factors like credit card and mortgage defaults.
It seems that more lenders, like Wells Fargo, giving small business loans to growing companies, can solve the chain effect caused by unemployment but there is a gamble for banks nowadays when many see the economic future as very uncertain.
Many are pressing banks to lend more to small businesses to combat unemployment and foreclosures caused by job loss, but banks, which are feeling the pain from nonpayment from their unemployed customers, are not eager to up lending.
Should banks like Wells Fargo pump more money into the small business economy in the hopes of creating more jobs and a profitable economy or are they right to err on the side of caution? Will small business lending create jobs and aid economic recovery and can unemployment improve without small business lending?