Small businesses have been in need of loans over the past months as there are more indications that companies are looking for ways to grow their operations, and hopefully, hire new employees in the near future. The SBA reported that small business loan efforts last year had been somewhat successful as the agency had approved over $10 billion in small business loan guarantees since the implementation of the Small Business Jobs Act.
Yet, there are still concerns on the part of some business owners who feel that credit is too tight and they are unable to find the assistance they need when it comes to borrowing for their company. However, there may be more loan opportunities available through smaller banks, like community banks or regional banks, especially as the Small Business Administration’s Loan Advantage begins in 2011. It’s hoped that the Small Loan Advantage and Community Advantage loan programs will offer companies who are in need of loans up to $250,000 the option to not only take part in a faster application process, but it’s hoped that these funds will be able to help companies and smaller, underserved areas as well.
Some community organizations, along with smaller financial institutions and banks which are part of the SBA’s preferred lender program are reportedly going to be able to offer funds from this new Loan Advantage program for businesses and underserved communities, so it’s believed that there should be options for small businesses to borrow in 2011 from the SBA.
While credit may begin to loosen from lenders, as the economy improves, and offer options for businesses through traditional small business loans, it’s hoped that this new program by the SBA, which is part of the 7(a) program, will be able to offer not only more small business loans to companies in general, but will be able to create jobs in underserved communities which may have a more difficult time when it comes to opening up their job market or growing businesses so that there community can thrive.
There have been some small businesses who have turned to financial institutions like credit unions or community banks for their borrowing needs, but evidence from the SBA report on loans made in 2010 has many of the mindset that businesses want to borrow so that they can invest in their company and grow, but if financing is restricted then these companies may not be able to get to a point where they are able to begin combating unemployment, so this new lending program by the SBA is hoped to be a sign that more small business loan opportunities from other sources will readily become available in the new year.