Unemployment has caused a great deal of strain for many individuals across our nation and the call for jobs has been directed at small businesses, but many business owners say that there is a difficult road to travel when obtaining a small business loan. Small business owners have accused many lenders of not offering small business loans, access to capital, or SBA loans to those companies who could hire more workers and help combat the unemployment rate.
However, it was recently reported that new legislation to help promote small business growth has begun to make its way through the Senate, where many feared it would be stalled or even discarded. According to a report on BusinessWeek.com there is hope that this bill will come to a vote in the Senate as soon as July 27.
Obviously, many small business owners who want to grow their company and hire new employees need access to capital so that they can either invest in themselves, meet payroll needs, buy new equipment, or simply acquire the means to handle more business. The Small Business Administration was, under previous legislation, able to guarantee a higher percentage of SBA loans that were made by small financial institutions. Yet, many small businesses report that when the funding for these higher guarantees was exhausted, lending stopped.
It’s hoped that this bill will not only quickly pass through Congress, but that the tax breaks and SBA loan programs that are contained within will help small businesses grow and lower the unemployment rate. There are many negative predictions that unemployment will remain high throughout the remainder of this year and into 2011, but if more businesses can gain the capital they need to hire new workers and expand, then obviously more people would have jobs and income which would allow them to put more money into the economy, and that would lead to more opportunities for businesses to grow.
Many feel that this lack of lending is a self-fulfilling prophecy aiding the slow economic and job growth that our nation has been experiencing. Small businesses who need money to grow have been unable to do so since money is not there, and many lenders are being accused of not lending until things get better. Analysts say that if lenders wait for businesses to expand and grow before they lend then businesses and our economy will simply suffer.
While there have been many lenders who have stated that businesses are hesitant to borrow, it’s hoped this new legislation will not only provide the environment needed for lenders to comfortably make the small business loans that are being asked for but small businesses who do need and want a small business loan will have access to this capital.