Incentives for banks to make more small business loans backed by the Small Business Administration through March were passed with the temporary unemployment extension that made its way through the Senate on Tuesday. Small business loans on hold were able to move along after the passage of the bill, which has caused many small business owners to breathe a sigh of relief for their business.
The Small Business Administration has been able to provide incentives for banks to lend more to small business owners by lowering fees associated with a SBA loan and by guaranteeing a higher percentage of small business loans made, thanks to governmental funding.
However, lenders are still not making small business loans at a rate that is meeting the need of small businesses, so the hope is that the incentives extended through the month of March, and possible extensions afterward, will provide banks with the security they want when making small business loans.
Small business is said to be one of the main weapons that can fight unemployment, but with such strict lending practices from banks, there has yet to be any significant benefits from small businesses in the job market.
The comfort that lenders feel in the economy is going to have to improve for them to begin making more small business loans outside of Small Business Administration loans, but until that time, the SBA is working to aid lenders with making loans to small businesses in need.