Joe Connelly, a lender at Harris Bank Barrington, believes President Barack Obama's tools to assist small business lending are helpful, but he questions if the plan will accomplish what is really needed - increase consumer's confidence to spend money.
"The question here is if it (Obama's plan) will convince the consumer to come out of their shell. Consumers right now are in a crisis of confidence and they're spooked to the core," Connelly said.
Suburban community bank leaders agree that sparking the credit lifeline to small businesses is a smart move, but that there is more involved in fixing the problem.
Obama's plan, announced earlier this week, is designed to stop criticism that the White House has focused too much on the needs of big banks and not enough on the economic struggles that small businesses are facing. The plan calls for the Treasury Department to spend up to $15 billion in securities composed of loans backed by the Small Business Administration.
"Anything to help small business is a good plan," said Bert Carstens, chairman of Libertyville Bank & Trust.
"We're hopeful that the new program will work, but we want it to filter down to Main Street," said Frank Appleby, president of the People's Bank of Arlington Heights.
Bank leaders just learning of Obama's initiative, say it will also lower fees and help the entrepreneur. "It looks like it's going to be favorable for SBA loans," said Pat Benton, president of First Community Bank in Naperville.
He added that it's still vital that the banks meet all the requirements in making a "prudent loan."
"We have to make sure it's a qualified borrower," Benton said.
He agrees that consumer confidence is the bigger issue.
"From what I've observed, people are ready to spend money when the confidence increases," said Carstens in Libertyville. He added that the Commerce Department's report Tuesday of a spike in construction of new homes is a start to making people feel there is hope in economy.
"We need more good news. We have to get people to feel good about spending money," Carstens added.
Confidence is key in this whole process, Appleby agreed. He said his customers are affected by the weakening economy as he sees their work weeks are shrinking and salaries cut.
"People need to feel like our economy is getting better," Appleby said.