Small Business Borrowing From Major Lenders And Local Banks–Is Finding Access To Capital Still A Problem?

Small business access to capital through small business loan borrowing opportunities have usually been available through major financial institutions or local banks, but there are still questions as to whether small companies looking to grow can find the access to capital they need. While there are reports that more businesses are able to acquire credit or capital, a new SBA small business lending initiative set to begin in 2011 is believed to bring access to smaller companies and underserved areas in the hopes of infusing more businesses and communities with growth potential and job opportunities.

Yet, access to capital is not all the concerns that many business owners have as there are some issues which President Obama spoke about in his State of the Union address related to small businesses. President Obama did address some concerns which need to be discussed, like regulation reform, business tax reform, and issues for small businesses related to new healthcare legislation.

Obviously, many businesses worry about taxes, as well as, what may become of tax increases at the end of 2012, and for this reason many feel that borrowing by small businesses may have been hindered by this uncertainty. When it comes to small business loans, there are either those who feel that financial institutions are not allowing companies the access to capital they need in order to grow and produce jobs, but financial institutions fall on the other side of the argument stating that many companies are simply unwilling to borrow.

While new small business lending initiatives, like those recently implemented in Michigan and North Carolina, may offer better access to credit for companies looking to borrow, but there are still concerns over whether businesses feel they are on a stable enough ground financially and whether the future is certain concerning their small business taxes to acquire debt. It has been reported that some companies have turned to smaller, local banks for their borrowing needs when major financial institutions did not offer access to credit, but there is still a concern that some companies simply do not want to borrow.

There are arguments that capital is available from either major banks or these small, community banks, yet when companies are simply unwilling to borrow, expand, and hire new workers due to uncertainty related to taxes, health insurance, and their lasting power in what many believe to be a still-recovering economy, it seems that simple access to small business loans are not the solution.

However, there is hope that small businesses who are looking to borrow will have the opportunity to do so as, again, new SBA loan initiatives are set to take place in 2011 and reportedly there are more major lenders that are loosening their lending practices so that more capital may be available to small businesses in need.