It’s been stated that the small business loans and borrowing opportunities are necessary so that companies can begin growing and adding to their workforce, thus combating high unemployment at the present time. However, some businesses have argued that lenders have been tight when it comes to providing access to capital, but a recent report stated that, in October, small business borrowing increased.
While there may be arguments for the fact that businesses are getting access to the capital they seek, previously, financial institutions stated that companies were simply unwilling to borrow at the present time. Obviously, there have been situations which seem to point to the fact that banks were not making loans, but in some cases there have been businesses who were hesitant to acquire debt.
However, access to small business loans are still felt to be needed and, thanks to guaranteed loans by the SBA, there have been periods throughout the year where companies were able to acquire access to capital or credit. Yet, despite the fact that borrowing has reportedly increased from last year, there are many who feel that simple access to borrowing for small businesses will not immediately produce more jobs or lower the unemployment rate.
It goes without saying that businesses must prosper and grow before they will need to hire new workers, or before they even can hire new workers, and with the slow economic growth that is being seen in some areas, this may take time. Yet, there may be good news in the area of profitability as there are also reports that small business loan delinquency fell in October as well.
While this fall in small business loan delinquency may give hope to the overall small business picture, as more businesses are able to repay their debt, there is still trepidation on the part of many companies as to if any prosperity that is being seen presently will be sustainable. Obviously, forecasts for the economic recovery vary, as some predictions indicate recovery will come sooner rather than later, but there are those who see increased borrowing on the part of small businesses as a positive sign since confidence may be growing in the ability of companies to expand, and hopefully add new workers in the near future.