Small business loans are being sought by many businesses who want to grow their business, expand their operations, and hopefully begin hiring more workers in the coming months. Small businesses have been asked to create jobs that are desperately needed to help combat the vast amount of unemployment our nation has been seeing over the past months.
Yet, there are concerns that many lenders are not making the small business loans that companies need in order to become more productive and add to their workforce. Many companies use funds from small business loans to buy equipment or provide funding to their company in ways that will allow them to handle more business, which obviously leads to growth and the need for more workers.
In months past, the Small Business Administration was provided the funding to guarantee a larger percentage of small business loans made from many financial institutions across the nation. However, funding expired due to the high demand of these loans and new legislation that proposes to revamp the SBA’s ability to guarantee a higher percentage of loans has not been passed and must wait until Congress returns from recess to be considered again.
While there are arguments by many lenders that small businesses are simply unwilling to make the commitment to obtain this type of debt from small business loans, those who believe businesses do not want to borrow are asking that more incentives be offered to companies who hire. For instance, a tax credit is currently offered to small businesses who hire workers that have been unemployed for more than 60 days and, if employers hire these workers and keep them employed for over a year they stand to receive tax breaks and incentives.
The legislation that is being proposed in Congress may in fact offer more funding for the SBA to guarantee a higher percentage of loans and extend tax credits for small businesses who hire, Congress was unable to pass this legislation before leaving to begin their recess. While many believe that September will be the earliest that this legislation may be passed, small business owners are still asking for access to funds or tax credits so they can begin growing their company and hiring unemployed men and women across the country.