Small business loans may start getting a whole lot more affordable, and the U.S. unemployment rate could possibly 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 dried up while banks were bailed out by the government. Banks have gone back to raking in billions when small company continues to struggle and unemployment remains high. Public pressure might be finally beginning to have an effect on loosening credit.
Source for this article: Chase cuts rate on small companies loans for companies that hire by Personal Money Store
Small business loan hiring incentive
Small business hiring incentives from J.P. Morgan Chase and Co. consist of lowering interest rates by around 0.5 percent on a new business line of credit for each new employee hired, for up to 3 employees, for the life of the loan. As outlined by Zacks.com, J.P. Morgan will also provide discounts to small businesses 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 also the public at large have scorned banks that received government assistance, yet refused to make small business loans to help reduce unemployment. According to The Wall Street Journal, 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 the economic outlook among small company owners has improved and small businesses are ready to expand and hire.
Small companies have other banks offering help
Many banks are making more small businesses loans. J.P. Morgan said first-quarter loans to small businesses rose 31 percent from a year earlier, to $ 2.1 billion. The nation’s largest bank, Bank of America, reported that small company loans rose 18 percent from a year earlier to $ 19.4 billion. Many banks, including J.P. Morgan, U.S. Bancorp, PNC Financial Services Group Inc. and Capital One Financial Corp. are giving some of their previously rejected small-business loans a second look. Two years ago U.S. Bankcorp began training about 3,000 bank managers all about more small business lending.
On small business loans, Chase will keep its word
The J.P. Morgan Chase offer to cut all of its rate of interest for companies that hire new employees is accessible for business lines of credit up to $ 250,000. It was reported by MarketWatch that the offer is also available for existing customers who hire new employees to increase their lines of credit by $ 10,000 or more. Chase business checking customers will 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 plans to try and increase its lending to small businesses 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 business credit cards. It said it would hire 325 more business bankers.
Find a lot more info 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
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