Another Chance for Small Business Loans?

When President Barack Obama met with banking CEOs earlier this week, he urged them to "take a third and fourth look" at small businesses that they had rejected for loans during the year. The question is, will the banks follow through?

The CEO of US Bancorp Richard Davis told meeting attendees that his bank would take a second look at every loan it rejects. Separately, JPMorgan Chase's CEO Jamie Dimon also agreed to take another look at small business credit applications that have been declined. James E. Rohr the chairman and CEO of Pittsburgh's PNC Banksaid he would evaluate existing procedures that offer a second look at small-business applications.

Other banks including Bank of America, Wells Fargo and even American Express say they have had second-look-style programs in place for a year or longer. However, in recent months, they've been "ramping up" these programs -- hiring new staff, widening their application inspection criteria and formalizing appeals programs, according to spokespeople with all three banks.

Further, the Financial Services Roundtable, a banking industry group in Washington, D.C., is attempting to corral other banks behind installing a program. "We're making the proposal and asking them to make it a policy," says Scott Talbott, a spokesman for the organization. Although the details on existing programs and how to take advantage of them are spotty, such policies will receive more structure in the coming months, says Talbott. At this point, he recommends small businesses to speak with their own bank to see if there's a second-look program.

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