Viewpoint May 1, 2009, 1:44PM EST

When Tight Credit Is the Right Credit

What Jessica Alba's financial crisis has to do with yours. Gene Marks argues that tight credit is actually a good thing for the star—and for small business owners

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Now wait a minute. I read last week that Jessica Alba's new movie has been delayed because of what appears to be a lack of financing. Are you kidding me? This is Jessica Alba we're talking about! She is, like, so awesome! And now I'm told her movie can't get financing?

As a business owner, I am outraged. This sounds very similar to what I'm reading about fellow business owners around the country who also can't financing. Of course the news about Jessica Alba is way more alarming. No argument there.

Things are Tough All Over

But what about the food manufacturer in Chicago that organized protests against its bank for pulling its financing a few months ago? And the auto dealer in Atlanta who accused his bank of "fraud and misappropriation of funds" because that same bank forced him into bankruptcy after he defaulted on his loans? And what of that nice lady in Florida who can't get financing to open a preschool? And the couple in New Smyrna Beach, Fla., who can't get the money to expand their golf club?

The government is accused of doing too little for small business. I'm hearing the Small Business Administration isn't guaranteeing enough loans. Meanwhile, the banks are supposedly hoarding their Troubled Asset Relief Program cash to make their balance sheets look better. And companies that need cash are complaining that getting money is much harder than it ever used to be.

And now I hear that Jessica Alba's film also ran into financing troubles? Damn you, Bear Stearns! This is all your fault!

Maybe all those small businesses and Jessica Alba really do have something in common. Maybe it's because they're finding out that it is harder to get financing than it was, say two or three years ago. Remember those days? That was when grizzly bears in the Bronx Zoo were getting loans to buy houses in White Plains, N.Y. When we were playing gin rummy with all the approved credit cards that kept arriving in the mail. When bankers rushed to back Jessica Alba classics like Good Luck Chuck and The Love Guru.

Sorry, Jessica. But those days are over.

Higher Standards for Borrowers

But don't worry. You'll continue to be fine. And so will many business owners looking for funding. The system isn't completely frozen. In fact, BusinessWeek just reported that the General Accountability Office showed SBA-backed loans sold into the secondary market increased to $135.3 million in February. That's still significantly below the average $364 million a month recorded in 2007. But that was 2007, when my sixth-grader got a loan to finance his Xbox collection. And Jessica starred in Awake. Ah, good times. Good times.

The fact of the matter is that most banks have plenty of money to lend to small businesses. They're just not lending the money like they used to. Instead, they're doing this crazy thing: lending only to those people who have the capability of paying the loan back.

"It was a big party for the last 10 years," says Robert Tabas, CEO of Royal Bank America in Narberth, Penn. "But we're well funded and happy to loan to small businesses." Don't believe me? Look at his online ad.