Small Business Loans Slow In Reaching Main Street

For small business owners, one of the greatest challenges is acquiring capital. Although the Small Business Administration was formed to ensure that small business owners had access to low-cost funding, small business loans have been slow in coming during this recession, leaving many small business owners with little or no cash to fund expansions or ease cash flow problems.

Now, the Treasury Department is working with the Federal Reserve and with private banks to create a $50 billion pool from which small business owners could draw. There’s nothing guaranteed about the creation of the fund, however. The plan is in response to complaints from small business owners that banks are no longer writing SBA loans because credit restrictions prevent them from lending capital to businesses that present any type of risk.

Independently, the Treasury is also working on a smaller, $10 billion loan program for small business owners, but that would require a reallocation of the TARP funds that had been previously set aside for financial stabilization.

Even if the programs are approved, they’re likely to come too late for many small business owners who need operating capital now, and would be forced to scale back or close their doors altogether without immediate access to working capital. The lack of capital availability has forced some business owners to seek out small business loan alternatives to fund their operational and expansion plans.

Rapid Capital Funding offers small business loan alternatives that can put cash into your business accounts in a matter of hours. For more information about how Rapid Capital Funding can help your business thrive in troubled times, contact us today.

Photo Credit: Duncan Rawlinson, via Flickr

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