Small Business Capital From Small Business Loans–Are Lenders Loosening Their Lending To Businesses?

Access to credit has been a major topic in numerous areas as some consumers have stated that banks are being tight with opportunities for credit, but more so, many small businesses have claimed that financial institutions have not been making small business loan opportunities available over the past months. While there have been recent indications that show banks are loosening their lending practices, there are also reports that some companies are simply unwilling to borrow at the present time.

However, there may be opportunities for businesses to borrow through opportunities like SBA loans, as many financial institutions may be more willing to offer these guaranteed loan opportunities to companies in need. While SBA small business loans are not the only type of funding a small business can receive, legislation which was passed throughout the year allowed the Small Business Administration to guarantee a higher percentage on business loans, which made more financial institutions feel safer about providing these forms of small business credit.

Yet, businesses may be hesitant to borrow despite the fact that there are some lenders which have loosened their small business loan practices. While some companies have argued that a lack of access to credit has caused trouble within the economy and has slowed recovery in the job market, there are arguments which state small businesses are just as hesitant to borrow as some financial institutions have been to lend.

While there are lending opportunities available from not only major financial institutions, but small community banks or credit unions as well, the cry for small business loans has mainly focused around their ability to help create jobs in the future. Again, small business loan opportunities may be more available, according to some, but many companies have said that they are unwilling to add new workers once they have acquired debt in many cases. On the other hand, there are companies who have stated they can hire new workers or take on more business with funding from a small business loan, which to will require that they hire more workers.

An SBA report from October indicated that the SBA Growth Capital Program had provided over $1.5 billion in financing to small businesses, but there are still some companies which may have trouble accessing funds from a traditional small business loan, and even those organizations that do find funding from business lending may still be unable to add new jobs at the present time. However, it is still hoped that access to capital for companies will begin to strengthen the economy, job market, and in the end make a major dent in the unemployment rate and current economic troubles.