See Solydra.
'It isn't hard for them. They will give loans to credit worthy borrowers.
The government should not be in the lending business.
Reducing federal expenditures and taxes does not necessarily translate into money being made available to private businesses. The banks have to be willing to lend.
Loaning money too small businesses is not necessarily taking money from some to help others. If the money is paid back with interest, that is not the case.
Solyndra was not a small business in my view. A company that has over one hundred million dollars in annual revenue is not a small business.
But that aside, one problem that Solyndra had was manufacturers in China started saturating the market with relatively cheap panels. I really think that the government can play a role in leveling the playing field through tariffs and taxes in that case.
'
So what did you mean exactly when you said that a small business loan was one of the hardest for a financial institution to make? I would be interested to know exactly what makes it so hard, of that is indeed the case.
Should the US government do more to help people become small business owners?
In an ideal world they should not be. But obviously we are not in an ideal world and the government does indeed engage in guaranteeing and making loans to businesses. And I'm saying that since that is the case, they should do more to make it easier for people who are trying to start a small business to get financing. If the banks won't do it, the government should step up to the plate.
Credit risk analysis requires expertise and having skin in the game. The failure rate for small businesses is my concern, as well as nonsense like "minority owned" or "enterprise zones" being a consideration when choosing who "deserves" our (the taxpayers) special help. I have serious doubts that a DC bureaucrat knows more about any local small business operation's chances of success than current area banks/credit unions do.
Startup Business Failure Rate By Industry | Statistic Brain
Why Small Businesses Fail: Top 7 Reasons Startups Fail and How to Avoid Failure
You attribute the failure of Solyndra to gov't actions (tax policy) while wishing the gov't to invest "wisely".
Much of that Solyndra revenue was due to gov't provided incentives (tax policy) that made no mention of the country of origin to qualify for those credits.
Once we start allowing the gov't to give tax preference to its own business investments then we are firmly into crony capitalism.
Because the SBA has to approve the loan and accept the loan. The paperwork is a nightmare. The process is a nightmare. The effort is burdensome.
I agree, the failure rate for small businesses is a concern. That's one reason why I was thinking that with my inventory loan idea, it should start small and grow as the business becomes more credible and demonstrates an ability to repay. As far as the DC bureaucrat goes, the government can hire people with business experience and who are familiar with local conditions to help make assessments. Sure, it may be difficult, but I think it's possible to do in a reasonable manner if thought out properly.
'
So what did you mean exactly when you said that a small business loan was one of the hardest for a financial institution to make? I would be interested to know exactly what makes it so hard, of that is indeed the case.
That is a shame. It sounds like that is an area that someone should devote some resources to trying to figure out a way to streamline the process. Part of the problem with government bureaucracies is that bureaucrats spend quite a bit of time trying to figure out how to cover their butts, as opposed to the task at hand. I bet a lot of that red tape is a result of that.
<snip>
my daughter just got her SBA loan granted....
it took 8 months.....and a lot of help from me on getting her to do all the planning docs
It's a hellish process, isn't it?
Did she end up with an SBA loan or a conventional small business loan?
The requirements imposed on banks/credit unions these days is a nightmare. They have to run spreads, RMA analyses, test and re-test, evaluate collateral, value collateral, and so on. Nightmare. And it's the government that made it this way, not the lenders.
The biggest problem is that government imposes too many taxes, and too many regulations, which make it too difficult to start or sustain a business.
One thing that I think conservatives should do, if they really want to promote the notion of self sufficiency, is to create, implement, and promote policies that are designed to help Americans who are attempting to start small businesses. Part of the problem for small business owners, even those that are established, is that credit has become more difficult to obtain. This in turn has the effect of depressing demand because there are less people with money than there would be if credit was more generous. Here's an interesting article:
Why Small Business Lending Isn’t What It Used to Be
I think the party that championed policies that made it easier for people who are starting a business to obtain the financing they need, as well as other assistance such as giving advice about the best suppliers of various products, and demographic analysis, would be a very attractive position for people to buy into.
What do you think? Should the US government do more to help people become successful small business owners?
Beat me to it. The government already offers a lot of help. What thwarts people more than anything else is over-regulation, making it harder to be and stay profitable. We need to dial back local, state, and federal regulations to a core necessity and leave people alone to spend time actually running their businesses.
The biggest problem is that government imposes too many taxes, and too many regulations, which make it too difficult to start or sustain a business.
The very last thing any would-be business owners need is more “help” from the government. Government needs to get out of the way, and stop stifling existing businesses, as well as efforts to start new businesses.
The way for government to “do more” to help business is for it to do less.
i will give you a small example of government out of control
i am in the retail automotive business
we are regulated by so many agencies i have lost count
regulations on what stickers must be affixed to every car on the lot....regulations as to what our advertising can and cant say.....regulations on our trucks that take vehicles to and from auctions....regulations on all the solvents, oils, gasoline, and other assorted dangerous materials we handle....regulations on the safety on how our employees must be dressed, and what protective gear they must use.....regulations on how our finance managers can submit loans for our customers to banks.....regulations involving cash transactions....regulations involving obtaining credit histories.....regulations involving all the tag and title work for all the vehicles we sell.....and the list goes on, and on, and on......
is government needed? sure
have we taken it to the nth degree? oh yeah
i pay a lot of money in wages every year to make sure all the stuff stays right, and legal
my wife with her food business has more in some areas, and less in others.....but needing 2-3 people just to deal with the governmental bull**** becomes a bit much at times
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