Maybe I'll start drinking coffee

"Banks start to make more loans"

That was the heading of a New York Times Dealbook story today.  But if you’re in the market for a small business loan or line of credit, don’t get your hopes up.

According to the story, “Loan growth is still modest. And it remains heavily weighted toward the strongest corporate and consumer borrowers.”

So while big corporate loans and consumers are finding access to capital easier, small business is still suffering.  The SBA reports that loans to small businesses dropped again in the second quarter although not as much as they have since 2008.

In spite of all the talk by politicians and government officials of how important small businesses are to the recovery of our economy, the rhetoric has been all talk.  Even the most important federal legislation passed to deal with the problem (Small Business Loan Fund) has been undermined by the banks and regulators and just screwed up by the Treasury Department.

What we’re left with is a very frustrated private, non-financial sector trying to come up with ideas to by-pass the government and spur small business growth on its own.    

How about this idea from Starbucks--buy some coffee and make a donation for small business development?

As Joe Nocera writes in his New York Times column today, the Starbucks plan will work like this.

Americans themselves would start lending to small businesses, with Starbucks serving as the middleman. Starbucks would find financial institutions willing to loan to small businesses. Starbucks customers would be able to donate money to the effort when they bought their coffee.

Starbucks did find a partner with Community Development Financial Institutions (CDFIs) in a project to start November 1^st.  You will even get a red-white-and-blue wristband with your $5 donation.

“Americans Helping Americans” is the theme.  We sure need something given the failure of our banks, Congress and the Administration on this critical issue.