Business loans are often the catalyst which fuels up any business operations.It may be both for a long-term as well as short.

Long-term is to fund procurement of assets, whereas short term is to meet working capital. To get loan, one will have to present a business plan. Loan eligibility will be based on the presented plan ( also there are other aspects like past credit record etc...) and its ability to make profit so as the bank will get its Return of Investment (ie., loan repaid).

Business Loan Status :



Small businesses though proved eligible, they are even made to wait for more than 6 months to an year. Start-ups are finding it difficult to get loans, even Federal Deposit Insurance Corporation Chairman Sheila Bair accepted this. Small business and Start-up lending is challenging and risky endeavour now.
A major reason behind this is that, their demand doesn't meets the current market needs. So this makes Business Loans a most risky one. So banks are taking a step back when approached for small or start-up loans.
Many small business even awaiting to expand their business.

Risk Aversion :

This risk was traditionally averted by collateral with real-estate. And even home equity is also used as collateral these days for small business.
Banks went a step ahead now to avert their risk by not lending loans for small businesses.

Banks fail to consider that Start ups are job creators, which is the need for the hour. Rough economy needs cuts in spends and not in lends. This will hurt the economy for sure in long run...