Small Business Loans And Access To Credit–Are Companies Getting The Funds They Need?

Access to capital for small businesses has been a debated topic over the past months as many small business owners have said they have not had the small business lending opportunities they have been seeking, while many lenders stated that businesses have been unwilling to borrow. However, recent news may suggest that small business lending has increased, which could point to an overall upward trend in economic recovery.

A report from CNBC states that the small-business lending index rose 16% in September, which is up from a year earlier. While there are those who argue that new small business lending opportunities that may be available or companies that obtain small business loans may not create jobs immediately, these businesses that are acquiring sources of credit typically do so in order to expand their business, purchase equipment, open new locations, or for other financial ventures which will necessitate workers in the future.

The SBA has, in recent months, then able to offer a higher guarantee on their loans, which allowed lenders in certain situations to provide more capital to these companies. While SBA small business loans have not been a guarantee for many companies, funding has been available to guarantee higher percentages on loans that minimized the amount a bank would lose if they made a small business loan.

Yet, business owners had, in the past, stated that even with SBA loans available at a higher guarantee, many financial institutions were still tight with their lending practices. However, there were many banks that countered with the argument that small businesses are simply either not in a position to borrow or did not wish to take on debt at the present time.

However, these reports that lending seems to be on the rise gives many hope that the job market may soon follow as small businesses account for a vast number of employment opportunities in our nation. Unemployed men and women seeking jobs have hoped that even temporary opportunities, like seasonal job openings, may soon become available, but it’s understandable that more permanent employment solutions need to be provided, and small businesses are said to be the solution when it comes to finding job opportunities which can help our economy gets back on its feet.