Small company loans might start getting a whole lot more affordable, and the U.S. unemployment rate might be affected. The nation’s second-largest bank announced Wednesday that it plans to lower the rate of interest on small company lines of credit for companies that hire new employees. Small business lending has been a hot button issue as credit stopped when banks were bailed out by the government. Banks have resumed raking in billions while small company continues to struggle and unemployment remains high. Pressure from the public may be starting to have an effect on loosening credit.
Hiring incentives of small company loan
Small business hiring incentives from J.P. Morgan Chase and Co. contain lowering its interest rate by 0.5 percent on a new business line of credit for each and every new employee hired, for up to 3 employees, for the life of the loan. According to Zacks.com, J.P. Morgan will even provide discounts to small companies for opening checking accounts. Also, J.P. Morgan plans to hold conferences in 11 cities across the country to assist local and small business owners to improve their sales figures and fund their businesses.
Are small companies ready to hire with banks ready to loan?
During the economic downturn, politicians and the public have scorned all of the banks that received government assistance, yet refused to make small business loans to help reduce unemployment. The Wall Street Journal reports that bankers have offered the excuse that there’s not enough demand from credit-worthy borrowers. And it’s true that losses from small-business loans are severe at major small-business lenders. But Kevin Watters of J.P. Morgan Chase explained to the Journal that the economic outlook among small business owners has improved and small companies are ready to expand and hire.
Other banks offer small company help
Numerous banks are making more small businesses loans. J.P. Morgan said first-quarter loans to small businesses rose around 31 percent from just a year earlier, to $ 2.1 billion. The nation’s largest bank, Bank of The US, reported that small business loans rose 18 percent from a year earlier to $ 19.4 billion. Numerous banks, including those such as J.P. Morgan, U.S. Bancorp, PNC Financial Services Group Inc. and Capital One Financial Corp. are giving rejected small-business loans a second look. Two years ago U.S. Bankcorp started training about 3,000 bank managers all about more small company lending.
Chase is going to keep its word on small company loans
The J.P. Morgan Chase offer to cut its interest rate for companies that hire new employees is available for business lines of credit up to $ 250,000. It was reported by MarketWatch that the offer is also accessible for existing customers who hire new employees to increase their lines of credit by $ 10,000 or more. Chase business checking customers are going to receive an additional half percent discount on their loan rates for hiring new employees. The offer makes good on a promise J.P. Morgan Chase made late last year. The bank announced it planned to increase its lending to small companies by $ 4 billion in 2010 to a total of $ 10 billion through access to working capital, term loans for expansion, commercial mortgages, lines of credit and also with some business credit cards. It plans to hire 325 new business bankers.
Discover a lot more data here:
zacks.com
zacks.com/stock/news/36284/JPMorgan+Motivates+Small+Businesses
TheWall Street Journal
online.wsj.com/article/BT-CO-20100629-713817.html
Marketwatch.com
marketwatch.com/story/hire-a-new-employee-chase-will-lower-the-interest-rate-on-your-business-loan-2010-06-30?reflink=MW_news_stmp
