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Good news for small businesses means good news for business, in general. CNBC reports that U.S. small businesses loans increased in the month of September. According to data released by PayNet, the increase in small business borrowing came sooner than expected. The Thomson Reuters/PayNet index measures the overall volume of financing to U.S. small businesses to determine the 16% jump from last year.
PayNet president William Phelan tells CNBC that the small business loan jump "doesn't point to anything but a robust recovery. These small businesses are people who see the demand in the economy every day, and they are alert to react very quickly to that demand."
Many are hoping that the small business loan jump in borrowing will translate to an increase in jobs. CNBC adds that many of the small business loans are used to buy new equipment. The next logical step would be to hire new workers to work the equipment. CNBC adds that nearly one in every ten U.S. workers is currently unemployed.
Banks and other lenders are often cautious when making loans to small businesses out of concern that the venture will fail, and they will not get their funds back. To combat this concern, banks are much more willing to loan to an already-existing company with cash flow. Hopefully this concern will not serve to stifle this positive upward trend that is happening with small business loans. FindLaw has some helpful suggestions for existing and new businesses looking to get a loan: clean up your credit report, write a business plan, apply for the right type of loan, and state the purpose for using the money.Related Resources: