It was found that many of the small-business owners say they are stuggling with lack of customers for their business.
A survey was conducted by National Federation of Independent Business, a trade group, which had found that 51 percent of small-business owners viewed lack of sales as their greatest challenge and 8 percent lack of loans. Further it was found that drop in home prices had made it hard for smalll businesses to get loans, as homes as pledged by most of them acquiring loans as collaterals.
Problems such as lack of sales and assets are making it difficult for the small businesses to achieve growth, during economic recession. New plans were introduced by the Government to reverse the condition of decreased lending.
According to federal data, banks reduced lending to small businesses by $15.7 billion(or 2 percent), between September 2008 and 2009. Obama proposed another round of federal aid to community banks, to assist banks keep safe their capital reserves, which are saved for unexpected losses. The aid announced is up to $300 million per bank and $30 billion in total. This lets the bank give more loans and take more risks.
According to NFIB, small-business owners are not ready to go for borrowing from banks, as their homes which are peldged as collateral have lost value. According to the experts, from the above thinking pattern f SMB owners, even the new federal aid proposed by government of $30 billion to community banks is also of no help. This makes the government to come up with new ideas to improve lending.