Laws & Legislation


07 02 2013

07 02 2013

New House Bill Could Help Small Businesses Access Capital

Rep. Nydia M. Velazquez (D-NY), has introduced two bills that aim to help individuals gain access to credit for small business and to obtain small business loans.

The Strengthening Entrepreneurs’ Economic Development (SEED) Act would address the difficulties that small business owners face when trying to obtain loans and credit. If passed, the act would open the credit market to independent business owners, especially small firms.

The second piece of legislation that Velazquez is promoting would make efforts to foster a small business and federal market environment that is more welcoming to women entrepreneurs. Legislation would include provisions to create a more equitable process for women to procure loans.

Velazquez explained the reasoning behind her proposal, stressing the importance of small businesses to national economic growth.

“Small businesses are the engines of economic growth and our best hope for creating new jobs during tough economic times,” Velazquez said. “By fostering an environment conducive to entrepreneurship, we can create good paying jobs and lead our nation back toward prosperity.”

Struggling to get credit

Although it has become somewhat easier for entrepreneurs to obtain credit since the financial crash of 2008, many lending institutions are still operating under strict rules and denying loans to many individuals.

In May of this year, 17.3 percent of small business loan applications were approved, a 7.1 percent increase from May 2012. Even though these improvements are significant, many of the remaining 82.7 percent of applicants who lost out on loans are struggling to stay afloat.

Velazquez further explained that, even in a thriving economy, it is difficult for small business owners to obtain loans, and that in the tough current market, these restrictions stall success and slow growth across the board. “For our economy to truly recover, the small-loan market needs to be restored,” said Velazquez.

Despite an overall consensus that small businesses are important to the economy, traditional lenders have been slow to restore flexible lending practices.

“It is clear that many financial institutions are not lending to small businesses at the same pace as before the financial crisis,” Velazquez noted.

Velazquez hopes that her bills will help ease these problems for small business owners as a way to propel business forward across the company.

If small business owners are having trouble getting a working capital loan or a merchant cash advance, they can turn to alternative lenders, like National Funding, for help.


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