Entrepreneurs used available loan funds to start businesses that added jobs. In 2009, the Small Business Administration leveraged lending to ensure available funds were given to finance innovative enterprise ideas. From the beginning of the year to the end, start-up activity increased.
Two Kinds of Small Businesses
Traditional small businesses on Main Street persevered during the recession while many ventures failed to stay viable. The familiar shops and restaurants relied on local customers to make enough sales for the year. Expecting that local customers would gain enough confidence to spend again, the businesses were able to plan for more sales. With higher projected sales, the owners used loans to support long term plans.
Innovative businesses performed well enough in a low sales period to increase a large amount of the activity in the American business market. With new products and technological inventions, the businesses were still high growth. Health care companies or solar power start-ups thrived when cutting edge technology was put into use. Long standing health care providers had new machines and techniques the companies relied on to plan expanded services. Some alternative energy companies recently formed. Lenders know these companies can grow very successful and help lead economic recovery.
Loans for New Business
After money had become in short supply, the Small Business Administration guaranteed lending so lenders could give money to innovators and secure businesspersons. SBA Administrator Karen G. Mills reported a prosperous year on December 14, 2009. (Building Businesses, Creating Jobs, and Strengthening Our Economy, at the National Press Club Luncheon, Washington, DC). She described how the administration increased backing for loans to leverage lending. As reported in the Recovery Act Report Card, SBA approved 13.6 billion in committed funds. When an owner in one of SBA’s locations across the country could use guidance on how to make the best use of the money, counselors helped them plan their finances for future stablity.
Entrepreneurs succeeded in securing the loans. During fiscal year 2009, America’s small businesses received 18.2 billion in loan funds to finance efforts to start an enterprise, sell more products and services or hire more employees. The numbers were up from 2008. With the money, traditional main street stores grew to serve returning customers. Innovators started new enterprises fit for the high technology and advanced service needs of 21st century customers. Over 1 million SBA clients received loans, counseling or training services. The entrepreneurs managed to create 14,201 new businesses.
Success Depends On Worker Abilities and Available Technology
Starting small businesses does not necessarily lead to a long term success. On January 15, 2010, the Assistant Secretary for Economic Development, John Fernandez, explained how the economy needs a suitable infrastructure for modern cutting edge businesses. (Remarks at Chicago Rail Summit, Chicago, Illinois). He also stated high technology companies need workers with education and skills that are modern enough for the work the companies plan for the future. Without these necessary ingredients for success, the growth will not create enough businesses that have a long term role for supporting an active economy.
The SBA expenditures made entrepreneur’s plans financially feasible. Entrepreneurs used the opportunity to lead recovery with their enterprises, both old reliable establishments and pioneering ventures. Turning the money into stable business will determine how successful the small businesses are at strengthening their half of the economy.
If you are seeking SBA loans or investment feel free to contact NW Exec for a consultation. http://nwexec.com