The access of credit through loans to small businesses has been a debated issue over the past months as many businesses feel banks have tightened their lending practices, which has been detrimental for some small businesses, while financial institutions say businesses still feel they are on shaky ground and have been unwilling to borrow. Yet, there are reports that some businesses are beginning to regain confidence and this may lead to hiring in the coming months.
Also, businesses, according to some reports, have said that they are finding lending opportunities, thanks in part to SBA loans which have been able to offer a higher guarantee on small business loans from certain financial institutions. Also, financial institutions like J.P. Morgan Chase and Wells Fargo are reportedly in the lead in terms of the amount in capital lent to in small business loans and the number of small business loans which have been made for the year.
Yet, there are some small businesses who are turning to community banks or credit unions to gain access to their small business loan needs. It is true that some borrowing opportunities may have been tight for borrowers as uncertainty over the future may have led to banks putting more restrictions on criteria which borrowers must meet. However, there have been arguments by many who feel that if small business loans are not made more available, unemployment will stay stagnant since job opportunities will not be created.
There are, though, individuals who feel that simple access to capital through small business loans will not create the jobs which many are seeking. Understandably, there are more banks and businesses which are becoming comfortable and taking more risks in terms of financing and investing opportunities, but just because a business is able to acquire a loan does not mean that they will necessarily be able to hire employees in the near future.
Yet, on the other hand, there are some businesses who can benefit from small business loans and could offer employment opportunities if funding were available through small business capital, but there have been some companies in this position who were denied a business loan. Again, businesses have looked to other lending opportunities from sources like community banks, regional banks, or great unions if major financial institutions were not willing to lend at the present time. However, advisers still caution small businesses to be cautious when borrowing as, again, uncertainty in business profitability over the next coming months is still an issue.