Small business loans can come from various sources, but many businesses feel that their borrowing options may be limited in some cases as there are some financial institutions that are simply unwilling to allow for more borrowing on the part of certain small business owners. However, options like small community banks or credit unions have been explored by business owner seeking to acquire small business capital, but lending initiatives from the Small Business Administration have also aided numerous companies who were in need of funding to either begin or reinvest in their small business.
While the SBA offers different options when it comes to aiding companies and finding the small business capital they need, there are some concerns that proposed SBA budget cuts could limit the options that business owners have when it comes to acquiring small business capital and credit. Recently, it was announced that the Small Business Loan Advantage program, which is said to begin on or before February 15, 2011, could provide a more streamlined process for business owners to get funding in cases where these companies need less than $250,000.
Yet, reports that the SBA is being reviewed and various programs within the organization may be cut may limit options that business owners have through SBA loans. There are many companies who feel that a traditional small business loan may not be within their reach due to the fact that, again, some lenders are being tight with their access to credit and unless a guaranteed SBA loan can be acquired by this company, they may have no options when seeking out funds for their company.
There are financial institutions who are more willing to offer SBA loans to companies due to the fact that the Small Business Administration will guarantee a percentage of a loan and prevent the lender from loss, but if programs are to be shut down there are questions as to whether small business loans will become less available once again.
However, there are arguments that many financial institutions, small banks, and credit unions are opening up access to capital once again as areas of the economy begin to improve and are allowing businesses to repay current debts or have now found themselves in a position where they can handle a small business loan debt. While it was reported that cuts that may come within the SBA program are being reviewed so that wasteful spending will be eliminated like access to capital and the ability of the SBA to assist small business owners will not be hindered.
SBA loans were popular last year as a higher percentage was guaranteed on these loans at different points within 2010 and led to more businesses finding the access to capital they need for their company and potential future growth, but business owners are also being reminded that the SBA is not the only source of small business loans. Again, as reports begin to show more major financial institutions are opening the books on small business loans, there are still alternative loan sources through smaller institutions and credit unions, as well as, microloans and independent investors.