Many small businesses are being called on to create much-needed jobs our economy and unemployed men and women are looking for. However, some small businesses have stated that financial institutions are unwilling to make these business loans that are needed in order to grow and expand their operations, which could bring more business and necessitate more hiring. Yet, there are also tax credits that have been made available so that business owners may benefit from adding more workers to their company.
While problems with small business lending have been well-documented, there are reports that banks are beginning to loosen their lending practices. Many small business owners took advantage of legislation that allowed the Small Business Administration to guarantee a higher percentage of SBA loans, but when funding expired small business lending apparently dried up.
Small business owners have been reportedly denied loans and many are upset since they cannot inject vital funding into their company so that they may become more profitable during these difficult economic times. However, there have been lenders who have stated small businesses are unwilling to borrow at the present time since many see the economy as uncertain. Also, there are those who argue that small business loans will not create more hiring since businesses are unlikely to take on more employees when they have acquired debt through small business loans.
There are some companies who have asked for business loans in order that they may handle more customers or projects and hire additional workers. However, a tax credit is available for small business owners who hire new employees and keep them for a specific period of time. Business owners who may be unwilling to acquire small business loans but may be able to hire workers can take advantage of certain tax credits that are currently in place that will provide a business owner with an incentive or exemption on their share of Social Security payroll taxes. Businesses may also receive a tax credit if they keep previously unemployed workers for a year.
While legislation is in the works to provide more funding for small business loans and reports have indicated that more financial institution are making small business loans available; there is also hope that an extension of the hiring tax credit or similar credits will be made available in the coming months so that business owners who are looking to obtain a small business loan will be able to do so or those companies who simply hire new workers may be able to benefit through tax incentives as well.