SBA loans help small businesses in the face of uncertainty

7/26/2011

A promotional printing company in Agawam, Massachusetts, Millennium Press, stumbled through the recent recession, but was fortunate enough to avoid layoffs and is now the recipient of a $1.98 million small business loan backed by the Small Business Administration and funded by a local bank, according to the Springfield Republican.

Although the 2012 federal budget presents a lack of certainty about commercial loans in the coming year, recent lending trends suggest the current proposed budget, which would increase funds available to the SBA by $824 million, may pass, especially if SBA loans continue to create jobs and stimulate growth, the source noted.

In the wake of the recession, many local banks that small businesses rely on for funding remain wary of giving out loans. The SBA works to reassure banks in the hopes that lending will jumpstart the economy in general.

According to the SBA, of the 27.5 million businesses in the United States in 2009, 99.9 percent of them had less than 500 employees. Small businesses produce more than half of the non-agricultural gross domestic product, and are essential to the U.S. economy. The role of the SBA in economic recovery is massive, and businesses and economists alike hope the 2012 budget will reflect an understanding of the importance and success of small business loans.