I received feedback on my original post about SBIR style grants for small business lending. The discourse centered around fairness of competing for loans. I think it is intuitively obvious that we already compete for loans. The problem is, our financial industry is only capable of understanding the borrower’s needs and capabilities in terms of financial ratios. This badly distorts the outcome of the competition.
In 30 years of business, no banker has ever asked me for a business plan much less taken more than a cursory interest in what my business was. In truth, the only thing my commercial banker has ever required is my social security number and my personal guarantee. To sustain our position as a global leader, the United States absolutely must change our fundamental financial practices. We must learn to invest in innovation and capability not credit ratings.