Credit Card Debt Increases Chance of Firm Failure
Aug 17th, 2009 | By Dawn Rivers | Category: PodcastsI don’t normally do themes with my newsletters, primarily because it’s pretty rare for the news to cooperate like that.
This week, however, the theme seems to be microbusinesses and money.
We have a new legislative proposals that threatens to take the money right out of our pockets.
We have two new studies about the topic, one that reviews the characteristics of different types of borrowers to analyze access to capital and another that provides our lead story for the week.
Yes, fans, credit card debt might not be such a good thing for small businesses.
This matters a lot to microbusinesses because, for the past few years, bankers and policy makers and economists have all behaved and talked as if the microbusiness access to capital problem had been solved by credit cards.
Nobody said that, of course, but they acted like they thought it. That is why a lot of folks on Capitol Hill stopped fretting so much about the need to tweak the Microloan program and perhaps looking at other creative financing possibilities for microbusinesses.
Why bother? The credit cards got the job done.
Now we get to say, Not so fast, Fuzzy Lumpkin! (Sorry for the Power Puff Girls reference, folks. I have kids, what can I say?)
For more information:
- Taxpayer Responsibility, Accountability, and Consistency Act of 2009 (H.R. 3408) (Text of legislation)
- National Association for the Self-Employed
- SBA Office of Advocacy
- Research Report: The Use of Credit Card Debt by New Firms (PDF)
