Small businesses are still struggling for loan opportunities and access to credit which are both needed in order to expand their company, hire new workers, and over all become more productive. A small business bill is in the works and could potentially provide up to $30 billion in assistance for small businesses through community banks. Also, small business loans may be more available if this legislation passes as there would be more beneficial terms for Small Business Administration loans, possible tax breaks, and grants given to states so that they may provide business loans.
Unemployment has been a blight on our nation for over a year as many people either saw the loss of their job or cutbacks in their wages at their place of employment. Many businesses have shut their doors or downsized their workforce, which has created a flood in the job market to an extent that the current pace at which jobs are being made available simply cannot compete. It’s for this reason that small businesses are believed to need access to these loans and to capital so that they can help combat the nation’s unemployment troubles.
While there are some businesses who are getting small business loans from community banks or credit unions, overall, a consensus seems to be that banks have shut down small business lending and SBA loans are no longer being made since a higher percentage of these loans aren’t guaranteed. Over the past months when the SBA had additional funding and was able to guarantee a higher percentage of small business loans there was reportedly a high amount of lending that occurred. Yet, when those funds were exhausted lending stopped but demand remained. Many point to this as evidence that small businesses want access to small business loans or credit and unless lenders began to provide these funds small businesses will be unable to grow.
There are reports that this small business bill will be voted on this week and, it is hoped that its effects will obviously be beneficial but also seen quickly. Federal Reserve Chairman Ben Bernanke stated that “companies who have fewer than 500 workers employee around half of Americans,” so many believe it is vital to get the small businesses up and running again. While business owners who have had trouble finding access to small business loans are being advised to look at small, community banks or credit unions. Yet, there is still a call at the present time for more avenues of small business lending to be created so that businesses can begin to grow and hire the unemployed men and women who have been struggling to find a job.