Small banks are being called on, by the Obama administration, to make the small business loans that many employers are looking for to grow and expand their business. There are SBA loans and simple small business loans that are part of proposals from President Obama, which would be made available through smaller institutions.
Incentives for money being used for this purpose is given to small, local, community banks so that the process will move in a more timely manner. President Obama was asked in a town hall meeting, “Why doesn’t the Small Business Administration just make loans?”
This seems to be on the mind of many small business owners who are looking to grow and hire workers, but many financial institutions are looking to avoid risky loans. This is problematic because small businesses can create jobs, but if they aren’t given access to capital they can’t expand.
So, there are proposals for small lenders to begin making these loans to businesses, since they are in a position to do so and don’t need time to train a staff to handle loans, like the Small Business Administration would.
Ideally, this program will make small business loans easier to obtain, with the possibility of lower interest rates since the Federal Reserve is keeping rates low, but that all will ultimately depend on the small business owner.
Small business owners looking for a small business loan may do well to look to community banks but, hopefully, these proposals for banks to begin lending more due to governmental assistance will bet set in place soon and small businesses will be able to reverse the unemployment problem.
