Small business loan borrowing for companies in need of capital or access to credit have brought about many business owners using a variety of strategies to find lending opportunities from banks, as previous months have reported that some financial institutions have been keeping their small business loan books closed. However, there have been positive reports that have shed light on the small business lending sector in our economy and have stated that more companies are finding access to these small business loans than in previous months.
Obviously, businesses may still simply seek out traditional small business loans from major financial institutions, but one method that some employers have used to find the capital and credit they need to expand their business is to begin working with community banks or credit unions as well. While some businesses feel that their best option for acquiring a loan may be with a well-established national bank, there are community institutions and credit unions that are also able and willing to offer small business capital to companies as there are some who feel the economic state of our nation is beginning to improve.
While there are still hurdles that need to be overcome, mainly unemployment and difficulties related to housing, some retailers are reporting increases in sales and businesses are being viewed as more stable, in terms of their ability to repay a small business loans. Some major financial institutions may still have tight lending practices in place, but smaller community banks, regional financial institutions, and credit unions all can be not only a source of small business loans for companies, but they may also provide a more one-on-one small business loan relationship that could help a company become more profitable and grow with the funds they receive.
Yet, there are currently plans for more small business loans to be made available in 2011 through Small Business Administration loans and other governmental lending initiatives that are hoped to bring capital to start-ups, established companies, and areas where communities could benefit from these small business funds but happen to be underserved.
Not all small businesses may qualify for loans, but it’s felt that in previous months when there were numerous complaints by companies that small business loan access was simply too constrained, overly cautious lending practices may have denied some business owners the access to cash or credit that could help their company expand and, eventually hire more workers. It’s understandable that many banks are trying to be careful with their lending practices, which is part of the fallout from the housing crash years ago, but with new lending initiatives and reports that small business lending has loosened by many financial institutions, it’s believed that the new year will bring more opportunities for businesses to access capital that will not only help them reinvest in their company, but hopefully combat high unemployment which has been a drain on our economy.