SmallBusinessNewz

Small businesses may have some trouble prying money out of the hands of bankers, as those institutions see their losses mount.

Banks didn't limit their poor underwriting of loans to the housing market. They also skipped a few steps to get money into the hands of small businesses, some of which now appear to be bad risks. Those decisions chowed down sharply on bank profits.

Just like in elementary school, when one person does something wrong, the whole class receives punishment. The Wall Street Journal said banks returned to their thriftier ways, requiring collateral and delaying loans for weeks as part of the application process.

Previously, a wink and a smile were virtually all a small business owner needed a couple of years ago to pull down as much as $100,000 for a loan, in as little as 24 hours from places like Bank of America and Sun Bancorp. Not any longer.

Last month, President Bush praised the importance of small businesses to the economy, especially in terms of job creation.

"If you're creating over two-thirds of the new jobs, why would we want to be taking money out of the treasuries of those job creators? Less money in your treasury means it's going to be harder for you to create the jobs necessary for this economy to be strong," President Bush said with regards to existing tax cuts on the books.

The tighter loan market may make that a moot point. If a deserving small business can't get an infusion of capital for expansion today, it doesn't matter what the tax rate will be. You can't tax zero.