WASHINGTON, DC-Real Estate Roundtable CEO Jeff DeBoer testifiedin front of the Senate Small Business & EntrepreneurshipCommittee last week on the seemingly perennial challenges facingsmall- and medium-sized businesses as they seek to access capitalfor real estate investment. The problems are well known--certainlythe Roundtable has highlighted them before intheir lobbying and educational initiatives.

Briefly, DeBoer recapped, aside from the money center banks, thebanking system remains frozen for small business lending becausemost small banks do not have significant excess liquidity to makenew loans and are in the process of deleveraging. Also, qualityloan demand is considered weak as small businesses are not, for themost part, seeking growth capital because the economy isuncertain.

Perhaps most significant of all, Deboer said, many small banksare already heavily exposed to commercial real estate--with theattendant issue that many of these loans are coming due under wateror at high risk for default given the economy.