25,000 Jobs Cut By Small Business In December

By Phillip Williams on January 25, 2010, 12:36 pm Posted in Economy News

Small businesses cut 25,000 jobs in December marking the 23rd month in a row that small businesses saw job losses. With a record 1.8 million jobs lost in 2010 small businesses cut forty percent of its total workforce. The treacherous economy has spelled trouble for small business owners everywhere. Some of the hardest hit businesses are those in construction and all jobs that feed into it.

Many entrepreneurs are shying away from taking the leap and starting their own business. The risks are too much and the loss too great if the business fails. Some economists think that how small businesses operate will change because of the recession. Many owners will take on more responsibility, trying to do it without creating a lot of overhead.

Bread And Butter

President Obama made a speech last week cited the importance of small businesses to the recovering economy. But with stricter lending guidelines and consumers turning to cheap rather than quality, small businesses are having a tougher time staying afloat. The difficulty will be cultivating the small businesses while continuing to grow jobs and stimulate the economy. This won’t be an easy task especially with banks cracking down on loan restrictions. Some remedies on the table include raising the guaranteed loan amount to 5 million from 2 million and offering tax breaks to banks that give small business loans.

 

Loans Tougher To Get

Banks are backing away from giving out small business loans. The potential risk has left banks uneasy about financing small business ventures or even giving expansion loans to established small businesses. President Obama urged banks to keep the loans coming in hopes of encouraging growth and new jobs. Many businesses have had to stall expansion plans because banks won’t loan them the needed money. Some are ven choosing to close up shop in favor of getting back into the workforce themselves.

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