Thursday, February 07, 2013

Micro loan hell

Have you ever tried to borrow just a few dollars? Say, $500 to $1,000? You can't do it, not unless you have two years worth of tax returns, so when a business has only been in business for one year, and so has only one year's returns to show, the banks scowl and shake their heads and say "no, we won't talk to you."

Why isn't there a small business lender that will loan money to new businesses on a short term, 6 months to a year, so when a small business runs into issues they can borrow a few dollars and pay it back at a reasonable interest rate? Instead the one place I looked at that can loan money fast on short term lending wants such outrageous interest that to borrow $500 for a few months (6 months i think it was), the borrower has to pay back over $1200.00. Really? $1,200 repayment on a $500 loan? OUCH!

I think there would be a great business opportunity for anyone that was to loan small businesses up to $1,000 with reasonable interest rates on the amount borrowed and low payments to assure that anyone can meet the monthly repayment amounts. To see a business go under because they can not come up with $500 or $1,000 that is needed because of an unforeseen emergency is not right, particularly when the business is one that is otherwise doing really good.

Just my two cents worth, if anyone wants to start a business, that could be one that would show decent returns I think. I might start something like that up next time I am ahead a few thousand dollars.