Small business loans are being requested by various companies but there are concerns that lending practices may be too constrained from financial institutions that can provide access to capital that many small businesses need. While big financial institutions have been accused of not lending, there are reports that some have loosened their lending practices and have made it easier for businesses to access a line of credit.
While the small business tax credit is still being used by a variety of employers in order to obtain incentives from hiring new workers, there are still companies who need funding from small business loans in order to accomplish tasks like buying new equipment or simply expanding their operations. There are proposals to provide the SBA with additional funding so that they can guarantee a higher percentage of small business loans, but there are many who feel that other areas of small business lending need to be assisted as well.
Many state programs that can help small businesses who are looking for capital from loans are having difficulty due to the economy and various state budget problems. A report on CNNMoney.com states that many of these programs are successful when it comes to creating jobs and allowing businesses to grow but without funding they will obviously be useless. A bill called the State Small Business Credit Initiative has been reportedly stuck in Congress and, due to a congressional recess, will not be taken up again until September.
While many of these programs have been helpful in the past, states are now finding it difficult to access funds to assist businesses obtain the capital they need, especially when some financial institutions are unwilling to make loans available. A variety of legislation has been proposed that range from this state small business credit plan to hiring tax credits and additional funding to the Small Business Administration.
There have been many banks that have stated businesses are hesitant to borrow at the present time but it’s hoped that proposals for these incentives to small businesses will not only provide access to capital where companies are in need but may also help create an environment where more companies can hire and combat the high unemployment rate our nation is facing.