Short-term interest rates will remain near zero until 2015. Then the Fed will buy up to $40 billion a month in mortgage-backed securities. These two measures will reduce interest rates for home buyers and other borrowers.
San Francisco, California (PRWEB) October 16, 2012
The central bank decision, announced by Federal Reserve Chairman Ben Bernanke on September 13, to launch "QE-3" was good news for small business all across the U.S.
"QE-3", which refers to the third round of quantitative easing by the Federal Reserve, means that credit terms will ease. First, short-term interest rates will remain near zero until 2015. Then the Fed will buy up to $40 billion a month in mortgage-backed securities. These two measures will reduce interest rates for home buyers and other borrowers.
Small business reacted positively to the move: “Thursday’s announcement of a bold stimulus plan offers new hope that we are on our way out of the malaise. Perhaps most comforting is Bernanke’s indication that he and his team are shifting their focus away from inflation and squarely on the clearest path to a stronger economy — the generation of new jobs,” said Paul Mandell, owner of the Bethesda, Maryland-based event development group Consero, in The Washington Post on September 18th.
Bernanke has said that the previous QE campaigns led to the creation of 2 million jobs, largely by small businesses. As credit conditions improve, consumers use their credit cards, take out auto loans, and just generally feel wealthier. That means more customers for small business, explains One of the problems for small businesses is lack of customers, and the QE move is thought to help.
Bank loans would help small businesses expand in this newly favorable climate. Yet a recent survey by SurePayroll showed that 82% of small businesses didn’t seek bank lending in the first two quarters of this year. Of those who did, 32% were unable to get the loans they needed. This data shows that banks are willing to lend to small business, said SurePayroll CEO and President Michael Alter in a press release on August 31st, 2012.
The Small Business Administration offers both banks and small business exceptionally favorable conditions for loans. Yet the SBA has a little more than $79 billion of loans on its books, compared to the more than $646 billion dollars of small-business loans held by private banks. That’s only 12.23%, and far below the SBA’s capacity.
What is the takeaway? Small businesses should not wait any longer to make applications for SBA loans or other types of business loans. If the complex procedures involved are the major obstacle, businessrd can seek help with a firm like Sunovis Financial, a national expert on SBA loans for small businesses. Sunovis and its division, The Lending Circle, helps small businesses with the entire SBA loan process from A to Z…that is, from pre-qualification to post-closing.
About The Lending Circle
The Lending Circle is a division of Sunovis Financial. The Lending Circle helps today's borrowers, including small businesses, with their lending needs. The company has a nationwide network of professionals and lenders who ARE active today. The firm also offers services to small banks to help them compete and thrive.