Assistance For Small Businesses Through Access To Capital–Will Access To Credit Help?

Recent news on small-business lending options through the SBA’s Express Loan Program and initiatives set forth by the “Startup America” program are hoped to bring more access to capital for companies who are looking for the opportunity to get established or expand their operations as there have been concerns that the lack of access to capital and credit has caused some areas of the economy to become stagnant.

Yet, there are those who question whether access to small business loans and credit will help companies improve their standing or allow them to hire more workers which are desperately needed in order to combat high levels of unemployment. Understandably, there are many business owners who may benefit from SBA loans or other lending incentives that could offer borrowing opportunities for numerous businesses, but there are some arguments that access to credit is simply not enough to solve unemployment problems.

While there have been more companies who have not only sought out financial assistance from the SBA, but when larger financial institutions may have denied them the assistance they needed through a loan, there have been businesses who turned to either smaller financial institutions, like Community Banks, or credit unions for their borrowing needs. There have been reports that many credit unions have wanted to make small business loans a larger part of their portfolio, but certain laws prohibit these financial institutions from having a certain percentage of their funds wrapped up in small business lending.

However, there are those who argue that some small businesses who have complained that there are no options for borrowing at the present time may still be unable to see any growth or will be unable to hire new workers even if capital is made available. Many areas of the economy are slow and there has been some hesitation on the part of business owners to acquire debt, but even for those who have, analysts feel that a company that has recently received a small business loan will be unlikely to take on new workers in the short term.

On the other hand, there are businesses who have said they can hire more workers at the present time if only small business lending options were more available so that they could borrow for their company’s needs.  However, it is hoped that these new initiatives by not only the SBA but the “Startup America” will offer more access to credit for companies who both want the opportunity to reinvest in their business and become more profitable, but are also needed to create the countless jobs that were lost during the recession.