Since the start of recession, Small Businesses have been struggling to get lenders to loan them money. Now, banks and credit unions are locked in a tussle over who should make loans to small business owners and deserve the most. The Jumpstart Our Business Startups (JOBS) Act is underway. It has made the battle fierce.
The Jobs Act lowers the regulatory hurdles to prevent small businesses from accessing capital. Banks are saying that Credit Unions are not meant for profit and are co-operatively owned institutions meant to provide financial services to members only. But Credit unions are emphasizing that they are legally granted permission to lend 12.25 percent to businesses. And the new steps taken would grant credit unions permission to lend 27.5 percent of their total assets to business owners.
Senator Mark Udall, lead sponsor of Small Business Lending Enhancement Act, introduced his bill as part of Senate’s Version of Jobs Act. It is intended for easing capital availability to small business owners and to increase credit union’s lending capacity. The bipartisan bill is introduced with support from co-sponsors like Republican Senator Susan Collins (Maine), Olympia Snowe (Maine) and Rand Paul (Ky.). If it passes then the cap of lending to small business will get raised and business owners will eventually gain more access to capital. Lending may range from $50,000, to $100,000 or even more up-to $200,000 depending on the business need.
This article was submitted by Raj Tulshan, Director of Business Development of Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to firstname.lastname@example.org