The Holdup To Economic Recovery


Most of us have not seen an economic mess like the one that we are in now. With the housing and foreclosure crisis and the unemployment rates hitting the higher double figures the economy looks rather bleak. Is there an end in sight? Of course, there is.

However, a large part of the problem no let me rephrase that, a huge part of the problem, okay, I mean a humongous part of the problem? I mean I really think this is a big, huge, massive part of the problem is that?

Small businesses can?t get loans to expand.

There is no money available for small businesses.

The atmosphere of fear from the banks is stopping them from loaning money to the exact people who could start the economy onto recovery.

Small businesses need capital to expand manufacturing, hire new people and create new jobs. Small businesses need capital to start new enterprises, market new products, to get the economy rolling again.

During the boom, credit was too loose. Unfortunately the bubble popped and many of the banks are sitting on bad loans. And many of the banks are afraid to loan to small businesses because of the bad loans they still have on the books.

But in order to get the economy rolling again, money has to start flowing.

Read this interesting article from the Wall Street Journal that highlights the issues.