Small business loans are being sought out by many business owners across the nation, but there are complaints that a lack of small business lending is causing trouble for both businesses and the job market. Small businesses are credited for hiring the majority of men and women in our nation, but without access to capital so that these companies may hire more workers, expand, or simply reinvest in themselves, the jobs that are needed in our nation will not be created.
However, a small business bill that is working its way through Congress is hoped to provide incentives that will prompt small banks and credit unions to begin making small-business loans again. The Small Business Administration guarantees small business loans up to a certain percentage and have been one means which small businesses have used to obtain the capital they need to grow their company.
Yet, recently incentives that were granted to the SBA expired and the higher percentage that was being guaranteed on small business loans dropped. While the Small Business Administration still can guarantee a percentage of small business loans, many lenders are being accused of not making SBA loans due to the fact that they are not protected to a higher percentage.
Legislation in the small business bill is hoped to provide more of these incentives to small banks to make SBA loans since a higher percentage will, once again, be guaranteed on small business loans. It’s also hoped that funding provided to states or tax incentives that may be offered to small businesses will promote more hiring and growth. Before funding ran out for the SBA to guarantee higher percentages of loans, reports indicated that many businesses were eager to borrow, but there have been lenders who have stated this is not the case.
While many small business owners say that they want access to capital so that they can hire workers and expand their business, there are lenders who believe that many businesses are fearful of borrowing since the economy is still quite uncertain. Yet, this small business bill is hope to provide access to capital for those companies that do want to borrow by making borrowing conditions more beneficial for both lenders and small businesses.