Small business loans have been requested by many business owners over the past months as many companies say they need access to capital to grow and expand their operations. Some companies were able to borrow SBA loans when legislation was in place that allowed a larger percentage of business loans to be guaranteed but since that funding has been exhausted there are complaints that lenders are not making loans. Yet, there have also been talks about the tax credit that has been made available for businesses that hire workers who were unemployed for more than 60 days.
These two ways which businesses can access capital have been debated when questions of job creation have arisen. Many businesses are asking for small business loans, but stalled legislation which could provide more funding for the Small Business Administration to guarantee a higher percentage of loans is making this type of capital inaccessible for many businesses.
However, there is a proposal to extend unemployment benefits into a 5th tier, which also carries an extension of the HIRE Tax Credit, which many businesses have used when they added workers. Arguments from various sources say that providing things like tax incentives is something that may promote the addition of jobs better than small business loans.
There are those who feel that even when a business can benefit from a small business loan, there are few companies who will hire workers after acquiring debt from an SBA Loan, for instance. Tax credits for hiring new workers are said to be a better option as many companies are hesitant to add workers when sales and consumer spending is low, and when a business acquires a loan, this will only further hesitations about hiring.
Yet, if a company is provided incentive by hiring, they may be more likely to do so. There are many analysts who feel that tax credits are one of the best ways to promote new job creation, and it’s job creation that will ultimately put more money back into the economy since men and women with a stable job typically spend more.
While a current tax credit is in place, and there are some small business loan options available, there is still the need for job creation facing our country. While opinions differ on whether access to small business loans are the answer or tax credits are the key to job creation, it’s hoped that legislation that is being proposed will created an economic environment where employers will hire more employees thanks to available tax credits and companies who need a small business loan will be able to find a lender to work with.