CHARLOTTE, NC (WBTV) - You've heard the phrase: "too big to fail." Big banks and companies got billions of bailout dollars to help them survive. But no such luck for mom and pop.
Many small businesses are suffering. These businesses are the backbone of our community and they need help.
Experts say small businesses are the key to leading an economic recovery. And many of them are having trouble getting capital, loans from banks to sustain and expand their business.
"Hi, I'm Jeff Albanese. Nice to meet you."
The customers who come into his shop, Euro Cars off Albemarle Road in east Charlotte get the personal touch from owner Jeff Albanese.
He's been in the auto repair business for 25 years.
Last fall he wanted to take in a business partner, hire more people and double the business. But when they tried to get a $400,000 loan, they got nowhere.
Albanese said what went through his mind: "I'm wondering about our economy. How can our economy survive? How can we make it better if we're not loaning money?"
It was the market crash about a year and a half ago that drove banks to do what they don't normally do. Sit on their money. But they did to cover their balance sheets - fearing widespread customers defaulting on their loans.
"What's holding the economy back at this point is the difficulty that small businesses are facing."
That's Dr. Alan Krueger, Assistant Secretary for Economic Policy for the U.S. Treasury Department who was speaking in Charlotte Tuesday.
Six out of 10 workers work for a small business. And in typical recessions small businesses start expanding (hiring, buying equipment) before large companies. But it hasn't happened in this recession yet which is why the government is trying to get banks back to the business of lending.
"It's absolutely critical to get the conditions right so small businesses can expand and prosper," says Krueger.
A step toward doing that came Tuesday at the Charlotte Convention Center. "Access to Capital for Small Businesses and Entrepreneurs" - a summit sponsored by the Charlotte Chamber and the city.
"Many small businesses are struggling," says Charlotte Mayor Anthony Foxx. "Some of them want to expand. Some of them have customers that are out there waiting to buy things from them but they're having trouble finding a way to get the capital to do that."
The summit brought together about 350 business people with the people who can loan money in hopes they can get together.
David Darnell president of Global Commercial Banking at Bank of America said, "We are focused on doing everything we can to help small and medium sized businesses sustain their business today and then look for opportunities to grow it for the future."
It can give small businessmen like Jeff Albanese some degree of hope. "For the economy to recover we as small businessmen are the ones that are going to make this economy grow," he said.
Banks say they're in a better position to lend now.
Bank of America for example says the first three months this year it increased its lending to small and medium sized business $3 billion over the same quarter last year.
And the government's trying incentives to get companies to hire. Under the federal "Hire Act" companies that hire someone who's been unemployed for two months or longer will not have to pay payroll taxes for that worker for the rest of the year.
And the government's working on making more money available to banks to loan to small businesses.