Over the recent months many officials have stated that the cure for the unemployment problem which is being faced at the present time would come in the form of small businesses adding more employees to their workforce, but accusations that banks were not lending to these businesses had many of the opinion that financial institutions were causing the slow growth of the job market due to limiting access to credit.
However, financial institutions have repeatedly stated that they have loosened their lending practices to small businesses and are not imposing strict standards concerning small business loans. The problem, according to these banks, is that small businesses don’t want to borrow. Yet, this statement has also been refuted by some as funding provided to the SBA to guarantee a higher percentage of small business loans has, throughout the year, repeatedly been used by companies seeking financing for their business.
This issue of small business loans has been one that has been debated throughout the year simply because it is true that some banks have continued to implement tight lending practices and have not provided capital to companies in certain conditions, but there is also truth to the statement that some businesses are simply not willing to borrow at the present time. Many companies have stated that they will wait for business or sales to increase before they began acquiring debt and hiring additional members of their workforce, which is understandable.
Yet many financial institutions and officials have stated that there is small business capital available to those companies who wish to borrow and can qualify. Again, many of the nation’s large financial institutions have stated they are willing to lend, business owners have turned to regional or community banks for access to capital, and there are small business borrowing opportunities from sources like the SBA as well.
While the economy does continue to struggle and business owners may not be in a comfortable position where they want to acquire debt, there are reports that indicate companies who do wish to borrow in the hopes of expanding their business and, hopefully, adding to their workforce in the near future have opportunities to do so. Yet, it goes without saying that businesses should not acquire debt without being in an advantageous position where they are able to repay their business loan.