Unsecured loans may be the answer businesses need
Small businesses are once again focusing on unsecured loans and using them to fuel their growth. The recession closed the doors on business owners in need of underwriting. Various surveys during the economic downturn show that consumers in need of any type of lending, especially for business purposes, were being turned away almost immediately. Even those consumers with moderate to great credit were being put through the wringer in terms of information and investigation prior to receiving any funding consideration. Consumers with bad to poor credit were completely out of luck.
Now that the recession has officially been deemed over by experts, it’s still a difficult time for business owners. For a long time, legislators have been focused on health care and that has taken the focus off of good lending practices and financial aid for businesses. Small businesses are now seeing some hope at the end of a long tunnel because President Obama is refocusing on credit lending for small businesses in an effort to increase jobs.
Unsecured loans and the unemployment rate
The unemployment rate skyrocketed during the recession. That was a main part of the problem; without money, consumers stopped spending. When consumers stopped spending, businesses suffered and were forced into layoffs that added to the number of unemployed. Jobs were eliminated and millions of Americans were left scrambling to make ends meet.
Legislators know that to truly turn the economy around they need to find ways of spurring businesses into creating jobs. One way to do that is to start lending. If businesses can find money for expansion, they can start creating full-time work to employ the millions of Americans who are currently in need of steady work. This is why the news that the Obama administration is focusing on revamping lending laws is so critical to the business world.
Concerns of business owners
Since the recession has been deemed over, the top priority is to get the economy functioning efficiently. People are creating jobs and pushing growth, and unsecured loans are an important part of prompting a change. That and handling the heightened cost of health care for employees top the list of small business owners’ concerns. In addition, federal taxes are also high on the list of issues owners would like squared away more quickly. A January report by the National Small Business Association showed that only 61 percent of small businesses were able to procure adequate financing and that number was down from 78 percent in August of 2008.
Handling health care costs
Healthcare cost regulation is an important part of the small business world. Though the president put it on the back burner for a few weeks, that doesn’t mean it won’t come up again in the very near future. Some analysts are hoping that the competition between private and government-back healthcare providers helps to regulate the industry and bring costs down. Not only would that give small businesses some financial relief, but it also it would open the door for money to be utilized elsewhere.
The future of unsecured loans
In the future small business owners should expect to see considerable changes in the world of unsecured loans. Though rules will still be strict, there will be newfound focus on where the money, once procured, should go. The government is doing all it can to help businesses try to put the money into creating jobs, but only time will tell if that is truly the result of its efforts.