The need for small businesses to grow and expand their workforce in the hopes that more job opportunities will become available is still a necessary aspect of the recovery of our economy as areas like housing and employment are still suffering due to the fact that that the economic recession that we experienced years ago is still having adverse effects. However, many businesses have argued that access to credit has been what one of the main hindrances happens to be in terms of creating the jobs that many feel will lead to recovery in various sectors, but the topic of small business loans, like those made popular by the SBA for small businesses and rural communities, is one that has recently been brought up as there are questions of whether businesses are looking to borrow.
Yesterday, June 16, the Senate Committee on Small Business And Entrepreneurship the held a meeting to review programs within the Small Business Administration, in the hopes of eliminating programs that have not been efficient or helpful when it comes to providing small businesses with the loans they need. It’s hoped that actions taken to eliminate wasteful areas of the SBA’s programs and will lead to more success in other areas, as there are still programs like the Small Business Loan Advantage and Community Advantage initiatives which were started not too long ago in the hopes of providing more borrowing opportunities for businesses who can grow and create jobs.
There are though, some reports here in June which have a more negative outlook on the job market, as there are small businesses that are not planning on borrowing or even looking for access to credit at the present time, but may look to cut their workforce in the coming months. It’s been stated that there are fewer companies who may have plans to increase their workforce and a higher percentage of businesses have also indicated that they may be cutting workers in the coming months.
The problem that remains though, is that if there are more men and women facing unemployment, this obviously creates less capital which can be injected into the economy by these consumers, and these businesses which are laying off these workers will obviously create a situation where they may see their sales or customer base decrease. This is where the argument of businesses cutting employees in the hopes of saving money is detrimental to the economy, as there are some businesses who may be in a position to keep their workers and this could help keep the unemployment rate low and more workers in a position where they can buy goods and services, while more jobs are added.
While there have been major banks that are stating they plan to increase their small business lending this year and SBA programs are still in place, it seems that the future for small businesses is still deemed to be uncertain as some companies are indeed looking to borrow and expand their operations at the same time that others may be cutting workers in the hopes of simply staying afloat or riding out this period of time where they may be struggling to get by.
Some companies are turning to SBA loans, traditional bank loans, and even community banks for their borrowing needs, but there are companies relying on angel investors for their financing. It seems that the opportunity to borrow is becoming more available in the business sector, but again, whether business can benefit from or even want to access capital from loans is still an issue that has a spectrum of current opinions and practices.