Fed to discuss loans for small businesses

WASHINGTON — The Federal Reserve will hold a forum next week to explore ways to improve the flow of lending to small businesses.

It's the latest effort by the Fed to tackle the problem, which dates back to the 2008 financial crisis. Congress and the White House also want to see banks lend more to small businesses.

Small businesses — more so than big companies — rely on bank loans to expand operations and hire. Small businesses usually help drive job creation during recoveries, but tight credit has hurt hiring.

Leaders from small businesses, trade groups and financial institutions will participate in the Monday conference.

The conference comes after the Fed has held a series of more than 40 regional meetings this year on the matter.

Federal Reserve Chairman Ben Bernanke has acknowledged that it is hard to tell whether the problem is more reflective of banks shying away from making loans to small business or a lack of demand from those companies.

Many lawmakers on Capitol Hill have complained that small businesses that want to take out loans are having trouble getting them, while some banks say demand is weak. The Fed has urged banks to make loans to creditworthy small businesses.

Lending to small businesses has declined even as the economy has improved.