Small Business Loans From The SBA 7(a) Loan Program–Are Businesses Finding Financial Assistance?

Small business loans are usually sought out through lending opportunities like the SBA’s small business lending programs, as many financial institutions may be more willing to offer these guaranteed loans to companies in need of credit. Yet, there have been concerns over the ability of businesses to find small business capital or access to credit through these loans over the past months, but lenders have been quick to point out that they are making loans available to companies that are in need.

Concern over tight lending practices have many worried that the job recovery may be stalled or slower then we could be seeing, as some companies who have sought out popular small business loans like the SBA 7(a) program are said to have been denied access to capital. While some financial institutions have been more cautious with lending due to current economic conditions, there are reports from banks which state many businesses are simply unwilling to borrow at the present time.

Usually, SBA 7(a) loans are one of the more commonly used SBA loan opportunities as many financial institutions across the nation will participate in this program and these loans are guaranteed by the SBA up to a certain percentage. Throughout 2010, the SBA was able to guarantee a higher percentage of some of their loans through governmental funding, but there are still complaints on the part of businesses that financial institutions have not been willing to lend in some cases.

There have been businesses who have turned to smaller financial institutions like credit unions for small business lending opportunities, as the Small Business Administration does not make these loans directly, but only guarantees them through other lending institutions. Recent surveys, though, stated that some business owners were unable to get the access to credit they needed or were not able to get the full amount of credit they sought.

Yet, some banks have reported increases in their small business lending, so this has business owners questioning whether small business capital is truly available through loans from banks or from programs like the SBA’s 7(a) loan program. Obviously, a business’s financial position may weigh into whether they can obtain a loan, as some companies may simply not qualify for access to credit. However, many banks are claiming they are making small business loans but demand is low, so this could point to the fact that funding opportunities are open to businesses in need.

There are options like traditional small business loans or SBA loans which are still available, and businesses may do well to talk with different lenders like national banks or smaller, community banks about lending opportunities if they are in need of capital which may help their business grow and produce job opportunities in the near future. While not all companies may qualify for or receive funding from a small business loan, officials are still prompting companies who may benefit from a small business loan to speak with lenders about borrowing opportunities, despite the fact that some reports have shown lending practices may be tight with some lenders.