Small Lending Institutions bullish about SBA Guaranteed Loans

Written on December 17, 2010 – 11:10 am | by Ashley Johnson

The dilemma of small businesses and the uncertainty shadowing their existence continues. But even then there are companies that seek small business loans from banks and other financial institutions. SBA guaranteed loans are also available from a number of financial institutions. Capital is needed by companies to start investing, expanding operations and making new recruitments.

As privately owned small business is a major source of employment in US, the focus remains rooted on small businesses. Mixed response persists among the small business lending sector. The reason is lending practices have been squeezed by financial institutions. Previously, higher small business loans were made available from the SBA. Additional funding made it possible for businesses to find higher percentage of SBA-guaranteed loans.

Financial institutions like that of J.P Morgan Chase have been making use of SBA funds to grant loans for small businesses. Chase particularly has doubled the loan amounts after receiving support from the Small Business Administration in 2010. Yet, Wells Fargo is the leading lender in terms of the dollar amount that it offers.

It is well understood that not all small businesses may qualify for traditional loans or SBA loans. But it is a stated fact that small businesses are turning their heads to smaller banks and credit unions to fulfill their borrowing needs. Large banks sometimes fail to provide capital to businesses. Though Wells Fargo and Chase have been offering loans, but some businesses have benefitted on borrowing from local lenders rather than national banks. The SBA micro-loan programmed has been providing opportunities to businesses that needed capital less than $35,000.

Business owners have now understood the difficulties associated with borrowing capital. Small business loans are made available and for this very reason it becomes necessary that various financial institutions be consulted. But, as uncertainty in the economy looms at large, companies are being cautioned about acquiring debts.

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