Small business loans have been a topic of discussion for many months as legislation that allowed easier access to small business capital through SBA small business loans allowed companies to borrow the money they needed to grow and expand. However, when that funding expired many small businesses said that access to small business loan capital disappeared. While there is new small business legislation in the works, there is concern that the bill will not be passed before Congress takes their August recess.
However, there are reports that small business capital through credit card loans may be another option for business owners who are in need of funding to grow their company, afford new equipment, or simply as a means to handle more demands. While options like SBA loans or traditional small business loans may be unavailable to many small businesses, there are those who have been using credit card loans as a way to infuse cash into their company when alternate opportunities for borrowing are unavailable.
Yet, many believe that credit card loans or any type of small business borrowing done outside of a traditional or SBA small business loan, will typically not be in a business’s best interest. It’s for this reason that there is pressure on the Senate to pass the small business bill that is currently in the works, as this particular piece of legislation can provide tax breaks and funding to the Small Business Administration, which can provide the guarantees on loans that banks have been looking.
Banks, on the other hand, have said that small businesses are hesitant to borrow as uncertainty over the economic future of our nation, job market, and business sector has many worried about incurring debt at the present time. Yet, small businesses are being asked to create much-needed jobs that the unemployed men and women of our nation are seeking, and it is hoped that the small business bill being proposed at the current time will provide an atmosphere where lenders will provide the access to capital for small businesses who want to invest in their company, hire new workers, and expand.
While small business lending has not completely shut down, complaints over the lack of access to capital has many businesses in a state of waiting to see what happens or simply unable to handle more business, hire more workers, or expand their operations. While credit card loans have been used by some, many advisers warn against accessing capital from credit cards due to interest rates and the potential damage that could be done to a business’s credit score.