Lending activity finally begins to be returning to the U.S. small business sector. Analysts hope this trend will lead to greater business investment, hiring and expansion efforts that will, in turn, boost employment and expedite the economic recovery.
Small Business Administration head Karen Mills wrote in a blog post this week that her agency is working hard to back private credit packages with SBA loans. In 2010, Mills points out, the SBA supported more than $30 billion in lending to small companies throughout the country. It has also launched joint efforts with private institutions to broaden the availability of credit to the market.
"Already these financial institutions, mostly community banks, have increased their small business lending by $3.5 billion," Mills wrote. "And, the 27 states participating in the State Small Business Credit Initiative are also putting the funds to use, supporting lending to small businesses and small manufacturers."
Todd Harrington, Chief Sales Officer for CIT Bank explained in a separate report published this week that recent gains in consumer confidence and spending provide hope, but they are not quite at the pre-recession levels needed to spur full-scale small business lending.
"Lenders need to be able to understand these opportunities and be available to finance these transactions to allow the small business owner to capitalize on the near term value plays that will set the table for growth in years to come," Harrington said in a statement.
To further illustrate his administration's commitment to the small business community, President Barack Obama exercised executive powers to include administrator Mills as part of his closest circle of advisers. Some small business advocates had been pushing the president to elevate the status of the SBA for more than three years.