OK – this is bad.
Over the last 10 years, small businesses have been the predominate driver of job growth, and hiring in this sector has always been a first and encouraging sign of any economic recovery.
Given that we’re now well into a year of “recovery” from the recession triggered by the financial crisis of late ’08, surveys this summer (2011) showing that businesses are still reluctant to hire is — to say the least — disappointing, but this is . . . jaw droppingly shocking:
Squeezed by tight credit and tempted by record high gold prices, small business owners are finding an alternative to the bank: the pawn shop.
More than half of the customers at online pawn shop, Pawngo, are small business owners [trying to make payroll], said Todd Hills, CEO of the Denver-based company.
(Note that this story isn’t coming from some small amateur site that is prone to publishing unsubstantiated, traffic driving hysteria – this is CNN money, and they are making this sound not that unusual).
The alarming implication is that not only are small businesses not hiring, they now seem to be having a hard time paying the employees they’ve got. Worse, pawnshop loans are not just another viable financing option – they’re a stark sign of economic desperation. Pawnshop loans almost always have interest rates close to, or at, the legal usury level, and the value of the collateral one needs to put up is usually far in excess of the actually loan amount.
One bright spot for small businesses that has so far been somewhat underreported is the uptick in small business lending by P2P sites. Bill Bartmann, who ran one of the more successful debt collection agencies in the 1990’s, and today is one of the highest paid business consultants that help businesses manage their debt and raise funds, says that online peer-to-peer lending platforms are becoming a more common option for smaller businesses.
Not only is P2P lending the rare bit of good news about small business financing, given that small businesses have historically been the main engine of job growth, P2P lenders right now seem to be one of the few financial institutions playing a role in the funding of job creation.
Are you a small business owner or entrepreneur in need of quick financing? Peerform.com offers peer-to-peer personal loans starting at rates as low as 6.54%, typically far below the “too big to fail” banks and even many of the smaller community banks. Our personal loans, up to $25,000, are perfect for entrepreneurs and small businesses looking to wholly or partially fund their business needs. We are one of the newest peer-to-peer loan providers licensed to operate in Arizona, Connecticut, Florida, Georgia, Illinois, Louisiana, Ohio, Maryland, Michigan, Virginia, and Washington. Check out Peerform.com today for your small business loan needs.