Small Business Loans From SBA And Private Lenders–Will More Small Business Capital Become Available?

Small business loans have been one of the big topics in 2010 as private lenders were accused of tightening their small business lending standards and opportunities from the Small Business Administration offered SBA loan options to certain businesses. However, there are more small businesses who are beginning to seek out capital which can be invested into their company, in the hopes of obviously becoming more profitable, but also, there are those who are calling on small businesses to create jobs which are still greatly needed.

While there are some mixed reports which indicate lenders are beginning to make more small business loans to companies in need, there are concerns over whether businesses have the stability at the present time to repay debt. Obviously, banks were being asked to allow more capital to be accessed by small businesses so these companies could hire employees, but some financial institutions said they were going to err on the side of caution and keep their lending practices relatively constrained due to the fact that some companies may not be able to repay debt at the present time and arguments that small business loans did not automatically create jobs were also present.

However, a new initiative which will begin in 2011 from the SBA is hoped to allow business owners to not only gain access to small business loans, but also, these companies may access SBA funds in a shorter amount of time due to a new streamlined application process. These new SBA loans are available to companies who may only need a small amount of capital and some community organizations and nonprofit agencies which promote job creation in underserved communities may also be able to provide capital to businesses in need.

There are those who feel businesses may begin to test the waters more in the coming year as there have been some improvements in the economy, despite the fact that unemployment and housing troubles remain. However, businesses who can create more jobs are felt to be able to solve these problems as unemployment has directly caused a number of housing problems and has cut down on consumer spending as well.

It’s hoped that in 2011 more financial institutions will begin to loosen lending practices in areas where small businesses feel they are having trouble accessing capital but the new SBA small business loan initiative set to address small borrowing and underserved community needs will also provide access to credit and capital that many small businesses have been seeking so that they can become more profitable and, hopefully, begin adding more jobs in the near future.