Essentially, small businesses are privately owned corporations, partnerships or even sole proprietorships with relatively low volume of sales and a small number of employees. In fact, small businesses are usually supported by the US government as they are considered to be the basis of economy.
Recently, small business owners were offered to participate in particular stimulus programs provided by the government which were aimed to encourage hiring people. Despite the fact that the owners of the small business could obtain low-interest and even no-interest loans for development and growth, a lot of advances were kept unused. Such low popularity of this small business funding program can be explained by too many requirements provided through Small Business Jobs Act. It was obligatory for small businesses to hire people with low or moderate income, besides, they had to fill out a number of additional forms. As a result, most of business owners keep using traditional financing for growth and development.
According to the latest reports performed by CNN, President Obama’s budget proposal released on Monday makes a squeeze for Small Business Administration in 2012. Comparing with $993 million funding for SBA in 2011, now it’s cut to $985 million. Besides, now lenders and borrowers readjust to the traditional loan terms performed by SBA. The guaranteed loan program has increased more costly due to the fact that default rates rose, particularly on loans provided between 2004 and 2008. Thus, SBA made the request of getting the authority to adjust the program’s fees and the idea will become effective in 2013.
Actually, it’s rather difficult to forecast what can happen next, however, it’s necessary to keep in mind that small businesses are the real basis of economy as they provide a good opportunity for creating new job places.
About the Author
Valery Thomson is occupied as a financial copywriter for the website dealing with no credit check loans online and she is eager to share her experience referring various lending options and financial tools.