For some time now, many small business owners across the country have found it difficult to qualify for lending from financial institutions that would help keep their companies growing stronger as the economy improves. For that reason, among others, it now seems as though one option through the federal government is growing more attractive to entrepreneurs.
Through the end of the 2014 fiscal year, which came to a close at the end of September, the U.S. Small Business Administration had signed off on more than 52,000 small business loans through its 7(a) loan program, up 12 percent from FY 2013, according to the latest data from the government agency. Altogether, those loans totaled some $19.19 billion, and that number was up 7.4 percent from a year earlier.
“As our economy continues to grow and recover, small businesses are the essential fuel to that continued growth,” said SBA administrator Maria Contreras-Sweet. “Thanks to the hard work and outreach by our lending partners, SBA staff, and our resource partners, as well as the small business owners themselves, we have been able to put more capital into the hands of our nation’s entrepreneurs. We know that America’s small businesses pack the biggest punch, creating two out of every three net new private sector jobs in the U.S. These small businesses are the cornerstone of our communities, so their success and expansion is vital to the nation’s economic growth.”
Huge demand breeds more lending
Interestingly, this improvement came despite the fact that the SBA was originally only authorized to lend some $17.5 billion to small businesses nationwide. When the demand early in the year was shown to be robust, the agency asked Congress for approval for an expansion of that money, the report said. Further, it should be noted that the number of smaller loans being requested by owners (those of less than $150,000) was up 23 percent, comprising nearly 30,700, while the dollar amount for them actually grew 29 percent to $1.86 billion.
Companies that want to make themselves more attractive to lenders might do well to find ways in which they can reduce other expenses, such as those for small business insurance, to streamline their budgets. Cutting costs for commercial insurance could go a long way toward freeing up some money – as much as thousands of dollars per year – that can be more wisely devoted to other aspects of the company.