In New York and in other parts of the nation, lending for small businesses has seen a clear rise. This is because the economy has improved and there is confidence among businesses though the activity is well below pre-recession levels.
The SBA’s 7(a) program has been used by 28 lenders to make 507 loans for $88.55 million in Buffalo District. That is an increase of 8.3 percent in loan volume and 13.8 percent in dollars. A 57 percent increase in loans took place inclusive of all programs of the SBA after the financial crisis of 2009.
Loan demand is returning and the incentives found as part of small business jobs act also has helped. Small business lending has been a key objective for the Obama administration and the Congress. Keeping this into consideration, small businesses representing vast majority of employers are paying part of nation’s private payroll, generating bulk of the country’s economic output and creating new jobs.
SBA does not play the role of disbursing loans, but it actually insures them. The federal government too guarantees repayment in cases of default up-to 85 percent of the principal amount. The year 2010 has been a year of recovery and small businesses are now in a position to buy new machinery and afford new inventory. Borrowing money this year is thus more beneficial and there has been a surge in the number of SBA applicants.
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