Issued at the end of September, the president of Congress, presumably the old Obama has the right loan to help a small business loan programs and small businesses. The law that the enthusiasm from the Republicans did while with the competition of the year large, it was a down drastically scaled-down version of a draft law in early 2010.
The companies real question is whether this law really helping small to obtain the working capital they need? In the theory ofAccount feeds loans to small businesses through the Small Business Administration guaranteed loan programs. Normally, these programs guarantee somewhere between 50-70% of small businesses against the default of the bank, the loan is loans. The new law increases the guarantee to 90% in some cases, in theory, reduce the risk of default and put community banks in a better position to take on such loans.
However, help, whether thator not is controversial. The problem is not that the banks to lend capital. With all the incentives the government, which was addressed to the banking system, financial institutions are flush with cash. The problem is really one of perception, attitude and real facts. While the loans were three years ago, the banks, with little attention to the risk of betting and the poor, who have now been resolved, apparently from the harsh realities and Standard bank failures in the past chastisedYears. This is a classic stalemate "situation" in which each of the big banks, community banks, businesses and consumer habits are waiting to see that spending make the first move in and start to dissolve the approval requirements credit.
Similarly, companies are waiting to whether consumers feel safe enough to sell to the purchase of goods and services that their companies have. Consumers are waiting to see if it will stabilize employmentenough to start spending. wait so in the meantime continue at all, and the uncertainty runs. Unfortunately, "small business" bill that would fully address this perception.
Facilitation programs use small business loans and less risky for banks to borrow in order is one thing, but the government can not force banks to do business, loans. Added the fact is that banks are increasingly worried about strict regulation which was imposed after the financial crisis, fears that even a small upward trend in the management of default lead federal regulators are sitting in their offices for months to sift through every detail of the operations in an effort to find fault or bad.
The bill also includes a series of targeted tax breaks for small businesses, especially the workers is to reduce taxes on wages for new hires, the possibility of alternative minimum taxService firms make R & D tax credits and tax breaks for owners of restaurants and other small businesses wanted to go further, to renovate or build. Of course, tax cuts are always welcome, but in this case, are only true if you plan to recruit more companies to spend money, developing or doing R & D
Small Business Loan Programs are not scarce. What is scarce is the customer always right amount ofapproved for these programs a reality for small businesses looking for Working Capital. Until changes in the perception of risk to consumers, this will alleviate a difficult problem, no matter how many pieces of legislation passed
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