Why “Big Banks” Are Turning Down Working Capital Lines of Credit at a Record Pace (Part 3 – Dodd Frank Does It Again)
- A $10,000,000 deposit would be used to establish the letter of credit facility
- When letters of credit documents were presented we were not able to use the $10,000,000 that had already posted as collateral to pay for the goods purchased under the letter of credit.
- New funds would constantly be needed to provided the bank to cover the drawings under the various letters of credit issued so the $10,000,000 in collateral would always be on deposit.
The federal government wants small business to thrive and grow and hire new employees to reduce the unemployment rate. However, the federal government’s policies have unintended consequences that actually stymie progress for small businesses. Could you imagine the growth rates of small business in the U.S. if the regulations that restrict their growth and ability to borrow were relaxed? There would be one hell of an economic recovery underway!!Visit our website or connect with us on LinkedIn or respond below should you wish to discuss this further.