Small business employs 50% of the U. S. work force. It makes up about 38% of the GDP. But small business cannot get sufficient credit from banks today. The latter are worried about strict regulators who appear over their shoulders to see that their books show little risk.
In fact, the easy money policy of the Federal Reserve makes it far easier for banks to borrow at little cost from the Fed and invest in government bonds. So why bother to make risky small business loans?
Small business has little access to public sources of borrowing. And they are usually in no position to sell stock to investors. Where will they get funds?
Credit cards are one solution. About 80% of small businesses pursue this arrangement, though rates are high. But this source is getting tougher, because of government meddling.
Left-leaning politicians believe that anyone who charges more than what a bank will charge is a usurer, even when there is no money available at bank rates. That’s because they cannot understand supply/demand economics. Even when a left-leaning government is responsible for keeping that supply askew.
The next time you hear the Obama Administration talk about real jobs, it will be mere talk. Nothing it is doing about available loans is being practiced.
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