A new small business loan initiative from the Small Business Administration may provide borrowing opportunities for more businesses in a timelier manner. Reports indicate that the SBA’s new Small Loan Advantage cuts down on paperwork which is required for small business loans and, for lenders, can streamline the process of allowing capital to businesses who qualify.
This new program is set to offer loans under $250,000 to small businesses, as there are still complaints from many businesses that they cannot get the credit they need. There have been reports that many small businesses have only received a small amount or no access to credit, which they needed throughout 2010, as the lending practices of many financial institutions have been tight for small businesses. Some banks have stated that they simply do not benefit from making small business loans, while others feel that many businesses are not in the position to repay small business loans at the present time.
However, guaranteed loans by the SBA may offer a wider number of borrowing opportunities for businesses who may be able to use funds to invest in their company and create jobs. Obviously, small businesses have been looked to in order to produce the economic growth our nation needs and create job opportunities in local areas, but small business owners have, again, often pointed to the fact that access to capital has been tight by financial institutions, which has prevented many businesses from expanding or hiring new workers.
With these new initiatives by the SBA, it’s hoped that in the early part of 2011 more businesses may be able to see access to capital and can begin not only making their business more profitable and efficient, but will grow at a rate which will necessitate the addition of employees, which again would obviously be a welcome addition to the job market at the present time.
Business owners, however, need to understand that the new Small Loan Advantage program from the SBA is no guarantee when it comes to accessing credit. Again, the motivation behind this program is to get loans under the amount of $250,000 to companies that can benefit from an injection of capital. Obviously, financing will require that a business be in a certain financial standing, despite the fact that the application process is said to only take minutes or a few days. Yet, opening access to credit through this program is hoped to not only spur hiring and growth in the small business sector, but aid the overall economy as well.