Although the economy has shown signs of improvement in 2011, New Jersey should not expect significant changes until 2013, according to a spokesperson for the state’s district office of the Small Business Administration (SBA). The SBA’s Harry Menta, a public affairs specialist in the Newark office, recently discussed various economic indicators with the Hackensack Record. He cited trends in business loans to suggest that growth among businesses is happening slowly, but steadily, throughout the state.
According to the SBA’s analysis, business loans during the fiscal year ending on September 30 increased by eight percent over the previous year, but have not come close to pre-recession figures. New Jersey businesses took out 1,290 loans totalling $678.2 million dollars in the most recent fiscal year. This is a slight increase over the 1,198 loans issued the previous year, but it is an enormous increase, forty-nine percent, from the $455 million borrowed by businesses that year. While the total number of loans is the more pertinent figure, the increase in amounts borrowed is still a hopeful sign for business growth. Increased borrowing and lending often signals increased confidence by both businesses and the banks, as businesses are willing to take greater risks to continue operations and banks are willing to finance them.
Menta also mentioned loans in two New Jersey counties, Passaic and Morris. Passaic County saw explosive growth in the last fiscal year, with 69 loans totalling $36.2 million, an increase from $13.8 million and 51 loans. Morris County saw no change in the number of loans and a small decrease in amount, with 75 loans totalling $30 million, down from $34 million in 2010.
The SBA predicts that construction and similar businesses, which have suffered since the 2008 Wall Street crash, will continue to struggle. Technology companies and other service-oriented businesses have much better prospects, since they often require much less overhead expense and capital.
The SBA is an agency of the federal government that supports small businesses and entrepreneurs throughout the country. It does this by supporting loan programs, providing assistance to areas affected by disasters, and conducting education and outreach programs. It also supports the federal government’s goal of awarding a specific percentage of government contracts to small businesses. Legislation passed after the 2008 crash allow the SBA to guarantee certain loans to small businesses up to ninety percent. Nationwide, the total number of SBA loans increased significantly by the end of 2010.
New Jersey businesses have extensive resources to support them through current financial difficulties. Aside from SBA programs, the state’s Small Business Development Centers offer education and support to small businesses and entrepreneurs. Menta notes that local chambers of commerce and business groups can also help local businesses weather tough times, and he predicts that businesses that can leverage an internet and social media presence to reach out to new customers have the greatest chance of success. Of course, we would be remiss if we did not mention the assistance and support that a knowledgeable New Jersey business attorney can provide.
The New Jersey business attorneys at Samuel C. Berger, PC offer fixed-fee legal services to businesses, investors, and entrepreneurs who want to do business in north New Jersey and New York. To speak to a member of our skilled legal team, contact us today online or at (201) 587-1500.
More Blog Posts:
Small Businesses Added 55,000 New Jobs to the Economy Last Month, New York & New Jersey Business Lawyer Blog, December 20, 2011
New Jersey Businesses Are Eligible for SBA Economic Injury Disaster Loans, New York & New Jersey Business Lawyer Blog, December 15, 2011
New Jersey Assembly Passes Bill Creating Small Business Loan Program, New York & New Jersey Business Lawyer Blog, December 13, 2011
Photo credit: svilen001 on stock.xchng.