Funding Business Loans to Keep America Strong

Business Loans

Today, we will depart a bit from the world of obtaining business loans for yourself to take a look at the bigger picture of capital markets, entrepreneurism, and growth.

There is no doubt that having artificial barriers to entry can be damaging to the efficiency of a system. In the case of business, this may mean that a regulation, or misguided policy keeps entrepreneurs from entering the market. However, with capital markets collapsing and loans defaulting all the time, how can we determine what is artificial and what is necessary?

Banks would love to give out business loans to more companies, if possible, since that’s more money in that for them. However, they can’t afford to do so when default rates for loans to the self-employed and professionals just starting their companies are in double digits!

So, how do we deal with this problem in the coming century? Do we funnel public funds through national and local governments into new venture with the hope they make us more money than they cost us? It is important to keep track of the bigger picture, as well. Whatever internal policies we decide on, our competitiveness in the global economy is not up to us.

At the end of the day, we will continue to add value. Through that, we’ll add value to continue to capture a high per capita GDP, or we won’t. Countries such as China and India are quickly racing us to the top. Make no mistake: China is manufacturing widgets because they can do it with people who live mostly at the bare subsistence level of agriculture. However, manufacturing is by no means the end game. The question is, who will come out on top in the information economy, and how will business loans play a part in that?

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Funding Business Loans to Keep America Strong was last modified: November 12th, 2013 by Amit Kraidman
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