Small Business Loans for Entrepreneurship

Business lending continues to be listed as a key reason small businesses are struggling in the recovering economy. But how true is the assertion? This roundup looks at the latest efforts to correct the situation and at the realities involved. Take a look:


Small business loans on the horizon. Six banks are receiving funds from the U.S. Treasury Department aimed at the small business sector. The funding includes $30 billion in small business loans which, it is hoped, will spur yet more small biz lending from smaller banks. Fox Business

Here is how the funding breaks down. Funding aimed at small businesses and coming from the U.S. Treasury Department will roll out in stages. The first stage will be $123 million aimed at six community banks announced yesterday. The money is part of funding first outlined by President Obama in his 2010 State of the Union Address. Bloomberg Businessweek


But small businesses are still struggling to get loans. Despite all the talk of the importance of small businesses to the economy, lending to small businesses has actually decreased, further stalling chances of economic recovery. The reasons are numerous but while large companies can turn to equity markets to raise capital, larger banks have become shy about lending and smaller banks may not have the resources. There are, however, other options. Time

A new more analytical approach to lending? Technology is taking a role in the way lenders are approaching risk as well. For small business owners and entrepreneurs, it may not hurt to get a more detailed look behind the scenes at how lenders see potential risk and how your business might be perceived. How can you make your company look better in the new algorythm? All Analytics

Other Opportunities

Business lending from an unlikely source. Office Depot announces Small Business Administration loans of up to $25,000 through Superior Financial Group, a federally regulated Small Business Lending Corporation. The deal for qualified borrowers includes a 10 percent discount on loan origination fees and eight years for repayment. Read more. WSJ

Get yourself a microloan. Global microlender and Visa Inc. are teaming up for a program that will make microloans available in some U.S. cities. For more on which communities will be selected and how the program works, be sure to check out the full press release above. Small Business Trends

Reality Check

Small businesses are borrowing anyway. But despite all the concerns raised over small business lending both by political leaders and by business owners who often reportedly list access to funding as their biggest problem, small businesses are apparently finding ways to borrow anyway. Their current borrowing ratrly money e is the highest since July 2008.

Some small business lenders just keep lending. In fact, one in particular has actually doubled its SBA lending in the first half of 2011. Despite all the hand ringing, this report puts concerns about availability of small business loans in perspective. Though some changes in lending have certainly occurred, money is certainly flowing to some small businesses out there. Kitsap Peninsula Business Journal


Lending currently on the rise. Despite all the doom and gloom about the lack of adequate small business financing, one survey suggests a positive lending trend is already beginning. For more on the latest numbers showing small business loans are indeed on the increase, see the full release at the link above. Market Watch


Could investors be the better bet? Small Business Trends founder Anita Campbell wonders whether increased bank regulations will continue to keep loans scarce forcing entrepreneurs to rely on personal credit or money from family and friends. But could private investors hold another option for business in need of financing. Open Forum

Joshua Sophy Joshua Sophy is the Editor for Small Business Trends and has been a member of the team for 16 years. A professional journalist with 20 years of experience in traditional media and online media, he attended Waynesburg University and is a member of the Society of Professional Journalists. He has held roles of reporter, editor and publisher, having founded his own local newspaper, the Pottsville Free Press.