In an effort to get business undergoing expansions, the good news is that small business loans are available to propel expansion plans. The Obama administration is doing all that is required to stimulate economy. Already $30 billion is earmarked for bank loans to small businesses. Hence, the sluggish economy gets a stimulus with this loan grant. More of the likes of “Mom and Pop stores” can now take advantage of this financial boon.
The $30 billion grant, makes it possible for banks to thrive in the unpopular area of ‘retail lending’. This being a slow sector banks have shown friction to lending. The regulations being tough especially in case of ‘commercial real estate’, has been the reason for disfavor of banks toward lending to the small business loan sector.
By offering the $30 billion grant, what the US government did is it has initiated efforts to alleviate bank’s concerns. The funding to this category comes at a low interest of just 1 percent. This would surely entice banks that are strapped with tough deals with the government. It is the ‘minimal strings attached’ to the $30 billion worth fund that makes it attractive to business owners to go for the small business loans.
This article was submitted by Rohit Arora, co-founder of Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to