Business loans from the SBA have been helpful over the past months for businesses that have found getting access to capital has been difficult, as these guaranteed loans have been felt to be a safer bet by many financial institutions who, otherwise, may have been hesitating when it comes to making certain loans to small businesses. Yet, new programs that have been recently implemented by the SBA are hoped to bring about an even greater amount of access to capital for businesses, despite the fact that there have been proposals to cut SBA funding, which could be either detrimental to small businesses or may be beneficial in the long run, according to some officials.
Obviously, the SBA has been an incredibly helpful source of small business revenue due to their loans and, according to an interview from the Wall Street Journal, the SBA’s chief, Karen Mills, the stated that when it comes to the new Small Loan Advantage Program from the SBA, “…we’ve been able to streamline the paperwork for both the borrower and the bank so that smaller loans now become more profitable and more accessible.” Also, the Community Advantage Program is hoped to aid community development institutions and development companies to give underserved areas more capital so that they can either establish or further current initiatives of small businesses in these areas.
Yet, there have been reports from sources like Foxbusiness.com that have mentioned proposed cuts in the SBA funding, and for those who feel that these proposed cuts to the SBA are going to be more helpful, in terms of the overall picture, for small businesses state that without taking control of federal spending, “…the real threats [to small businesses are] an increase in our tax burden.” Arguments for cutting funding to the SBA have usually centered around getting rid of programs that are simply not effective, rather than cutting off points of access to small business revenue, but again, making cuts in various area of the budget will be necessary to help small businesses avoid increases in taxes that may arise in the future.
For small businesses, loans from the SBA through either these new Advantage Loan programs or options like microloans are still available and could be helpful for businesses looking to either establish themselves or begin growing in the hopes of becoming more profitable, but there are also indications that private business loans and options from lenders like credit unions are becoming more available too, as many see the economy and businesses to be in a more positive position than it was last year. While there are still areas of uncertainty, some small businesses may not be guaranteed access to capital through either private loans or the SBA, but for businesses who are looking for financing, there are still arguments that capital is now more accessible than it was in previous months, and if the private business sector keeps growing, this could lead to more confidence in lenders that, subsequently, could bring further options for small business lending.