Million of dollars got funneled as small business loans as a result of Federal economic stimulus package. The funds went to burger chains, hotels and retailers as the government tried to kick-start lending.
The Government stimulus program served as a tool to make capital available to small businesses at a time when banks curtailed lending. It is through the stimulus packages that the Federal government made $1 billion SBA loans available, in-order, to encourage banks to keep lending. Wisconsin businesses, for example, found stimulus loans for sectors like retail, food service, manufacturing, lodging, and construction.
The funds then could be used by business owners for constructing buildings, buying new equipment, and refinancing debt. Also, loan amount ranged from $5,0000 to a high of $5 million. Over 6,000 loans have been made in Winconsin.
SBA officials are opining that the Stimulus loan program is accomplishing what it is intended for. Businesses could find access to capital when banks constrained its lending activity. However, SBA officials could not make it clear as to what percentages of businesses are able to repay the loans.
Marianne Markowitz, SBA regional administrator, says that SBA has been the lifeline for companies that had no other place to turn. It is through the Small Business Lending that it has become possible to add 3.7 million jobs in the economy. The loans helped businesses to expand and create new jobs.
This article was submitted by Raj Tulshan, Director of Business Development of Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to firstname.lastname@example.org