Avoiding Problem Banks and Zombie Banks
The path to successful small business finance solutions is currently uncertain because of the negative commercial lending impacts from Zombie Banks and Problem Banks. The financial stakes are always high when small business owners are attempting to obtain commercial loans and working capital financing. When there is added confusion as to whether a banking institution is able to actually make a small business loan, small businesses are left to wonder how to proceed. One public indicator of commercial banking problems is the Problem Bank List maintained by the Federal Deposit Insurance Corporation (FDIC). For example, a recent headline reported that “Problem Bank List at 20 Year High as Regulators Let Zombie Banks Remain Open”. The following statistics will help demonstrate why there have been negative bank lending trends to small businesses for the past several years.
2006: 47 banks on the FDIC Problem Bank List (also called the Troubled Bank List) 2008: 252 banks on the Troubled Bank List 2009: 702 banks on the Troubled Bank List 2010: 829 banks on the Troubled Bank List 2011: 844 banks on the Troubled Bank List 2012: 948 banks on a separate (but unofficial) Problem Bank List
1993 to 2007: a total of 123 bank failures for the 15-year period (average 8 per year) 2008: 25 bank failures 2009: 140 bank failures 2010: 157 bank failures (the highest number since 1992) 2011: 92 bank failures
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