In recent months, a number of polls have shown that small business owners have had a little difficulty in obtaining financing as they planned to expand the size of their companies in some way. However, this may be a result of their not checking with smaller banks in their areas, which say they're extending considerably more credit to independent enterprises these days.
Today, more than 90 percent of community banks participating in the federal government's Small Business Lending Fund are granting more credit to small businesses, according to the first annual SBLF Lending Survey from the U.S. Department of the Treasury. Of the new, larger number of loans being issued to these companies, more than four in five were in amounts of $250,000 or less. Through the end of last year, it seems that the companies applying for this type of financing received an additional 38,000 loans. Altogether, this totaled some $8.9 billion above the baseline observed in 2009, just prior to the SBLF being introduced.
"Across the country, the Obama Administration's Small Business Lending Fund is helping small business owners gain access to the capital they need to expand their businesses and hire additional workers," said Deputy Secretary of the Treasury Neal Wolin. "These increases in lending allow entrepreneurs to turn their hard work and good ideas into thriving businesses, moving our economy and country forward."
The area that obtained the most small business loans through the end of last year was the South East, where companies were granted 11,100 lines of credit, the report said. The South West (9,500) and Mid West (8,800) rounded out the top three, while both the West and North East, at 2,600 and 2,100, respectively, were well below fourth-place Mid Atlantic (3,900). However, all areas saw business lending increase during this time.
As small businesses prepare to expand and take on credit, it might also be wise for them to consider other areas that might be affected by these efforts. For example, a small business insurance policy costs may necessarily rise if they bring on more workers or increase the physical size of their businesses. Higher costs for general liability insurance or workers' compensation insurance policies may not always be avoidable in these instances, but it may be helpful to explore all available options to find the most affordable plans on the market.