Jim Brown, owner of JWB Properties LLC, says community banks called him almost every day in 2006 trying to lend him money. Now, his homebuilding business in Atlanta can't get a loan.
"The small banks became really, really cautious, and real estate became a dirty word," said Brown, 65, whose one-man company takes on workers on a project-by-project basis.
Tighter lending standards among U.S. community banks help explain why small businesses are adding jobs at only half the pace of large employers. The Federal Deposit Insurance Corp. says the 6,900 institutions it classifies as community banks supply almost half of small business loans. Their health has become a focus for Federal Reserve Chairman Ben S. Bernanke and his colleagues.
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