Economic Recovery: It's About Small Business
According to an article on Reuter's today, small businesses create over half the new jobs in this country but access to credit two years into the recession continues to be scarce.
I know this to be true, firsthand. I work directly with business owners to sell and buy businesses. A year ago, things were not as tough as they are today to get SBA business acqusition financing. Now, bankers don't even call you back. So much for "relationship banking" the euphemism that many used during the boom cycle.
Hello Congress and President Obama! Stop fussing around with health care. That's NOT the biggest problem right now. The small business community is "sick" because they can't get access to capital.
When banks make loans, the economy improves because money circulates. The current credit crisis is a lack of confidence by banks to fund deals. And the the lack of confidence comes from the banking system's over-exuberance to make mortgage loans to people who didn't qualify in the first place. Now, we're all paying the price.
The only way to fix the problem is to acknowledge it. Address it. Find a solution. And implement it. I'd prefer the government stay away from private industry but it's too late for that as the Democrats race headlong to nationalize banks, health care and auto makers.
Perhaps, small business owners need a direct bailout from the government. But that would only perpetuate the problem and put more people on the government dole-out. And guess who would have to pay for it? Yeah....you, me and the very business owners that need the funds.
So it's best to find another way.
Business owners are finding ways to survive. They are bartering, trading, reducing, revising, and eliminating goods and services. It's a rough and rocky road and we don't know where it will end up.
One thing is for certain, our attitudes about credit and banks will never be the same. This must be what it felt like for my grandparents during the Depression. No wonder they kept their money under the mattress.
I know this to be true, firsthand. I work directly with business owners to sell and buy businesses. A year ago, things were not as tough as they are today to get SBA business acqusition financing. Now, bankers don't even call you back. So much for "relationship banking" the euphemism that many used during the boom cycle.
Hello Congress and President Obama! Stop fussing around with health care. That's NOT the biggest problem right now. The small business community is "sick" because they can't get access to capital.
When banks make loans, the economy improves because money circulates. The current credit crisis is a lack of confidence by banks to fund deals. And the the lack of confidence comes from the banking system's over-exuberance to make mortgage loans to people who didn't qualify in the first place. Now, we're all paying the price.
The only way to fix the problem is to acknowledge it. Address it. Find a solution. And implement it. I'd prefer the government stay away from private industry but it's too late for that as the Democrats race headlong to nationalize banks, health care and auto makers.
Perhaps, small business owners need a direct bailout from the government. But that would only perpetuate the problem and put more people on the government dole-out. And guess who would have to pay for it? Yeah....you, me and the very business owners that need the funds.
So it's best to find another way.
Business owners are finding ways to survive. They are bartering, trading, reducing, revising, and eliminating goods and services. It's a rough and rocky road and we don't know where it will end up.
One thing is for certain, our attitudes about credit and banks will never be the same. This must be what it felt like for my grandparents during the Depression. No wonder they kept their money under the mattress.
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