Banking analyst Meredith Whitney isn't optimistic about small business financing

Small businesses in the United States are not getting enough access to credit and the phenomenon is being reflected in dismal consumer spending trends, prominent banking analyst Meredith Whitney wrote in an opinion column on the Wall Street Journal's website.

"In the U.S., small businesses employ 50 percent of the country's workforce and contribute 38 percent of GDP," Whitney wrote.
"Without access to credit, small businesses can't grow, can't hire, and too often end up going out of business."

Whitney said smaller banks should be provided incentives to step up small-business loans on a greater scale.

"I believe that we are only in the early stages of the second half of this credit cycle," Whitney wrote.

"I expect another $1.5 trillion of credit-card lines to be removed from the system by the end of 2010."

Whitney, who shot to fame by correctly predicting much of the banking sector's carnage in recent years, left Oppenheimer & Co and launched her own firm in February — Meredith Whitney Advisory Group LLC.

Source: cnbc.com