There have been reports that lending to small businesses has slowed due to the fact that the Small Business Administration has exhausted its funds to cover a larger amount of small business loans that are made to various companies. Over the past month, the FDA was able to guarantee a higher percentage of loans due to the fact that governmental funding was available to them when they backed a loan made by financial institution.
While many believe it is a good sign that the SBA has exhausted its funds and can no longer guarantee a higher percentage of small business loans, there are those who say that it is bad for business. On one side, it shows that small businesses are willing to hire and they are looking for the funds to grow their company, but on the other side businesses that are still waiting to hire and keep employees cannot gain the funding they need to do so since the SBA has run out of funding that previously made small business loans less risky for lenders.
Some lenders have stated that small businesses have been hesitant to borrow, but there are business owners who say the opposite and that they need the access to capital so that they can expand their business into other areas and increase their workforce so that productivity can grow as well. The small business sector is being called upon to combat the high unemployment rate our nation is facing and create much-needed jobs.
While Small Business Administration loans are still available, they simply will not cover a larger percentage since this additional funding is gone. However, business owners can still consult the SBA website or talk with lenders in their area about obtaining a small business loan to help their company grow and increase their workforce.