Many small business owners have complained that financial institutions have been reluctant to lend and, as a result, many small businesses have been unable to grow and hire new employees. While many small businesses will not hire workers with funds gained from a small business loan, small business capital from a loan can help businesses take on more clients or projects, which necessitates the hiring of more workers in many cases. Yet, complaints from business owners have indicated that this lack of access to funds has been hindering small business growth and job growth as well.
However, there have been recent reports of banks doing more to lend to small businesses by easing their small business loan requirements. Many lenders have been hesitant to lend to small businesses due to the fact that small business loan defaults are becoming a problem. However, Bank of America CEO, Brian Moynihan, recently stated that they are seeing an improvement in small business loan defaults.
There have also been small business tax credits available to certain employers who hire new workers and keep them employed for over a year. Recently, the Small Business Administration was given funding to guarantee a higher percentage of small business loans, but since that funding expired many business owners said that SBA loans were unavailable. However, legislation that was recently proposed is hoped to provide additional funding to SBA guaranteed loans and extend tax credits to small businesses who hire.
There are small business lending opportunities in some areas but, according to small business owners, the overall lending has been down. Yet, lenders say that small business owners have been hesitant to take on debt since many still feel the economic future is uncertain. However, small businesses who may be in good financial standing might find small business loan opportunities but some may have to turn to small community banks if larger financial institutions will not land.
It’s hoped that in the near future new legislation will make more funding available to small businesses that are in the position to borrow and provide more tax incentives for employers who hire since small businesses are being called on to create the much-needed jobs our nation must have in order to combat the high unemployment rate we are currently facing.