Entrepreneurship and new small businesses are supposed to lead us out of the recession, just as they have in prior downturns, right?
The next person to have a good idea is headed to the bank with a business plan to ask for a loan in order to launch her business in 4 weeks right?
If only be that simple but the reality is different, with the rate of unemployment hitting double digits and the record of bankruptcy filings reaching all time records, banks are not really too motivated to lend for new start ups.
Problems from the devastated housing market, overall recession and suffering major industries all funnel down to small businesses, especially those that supply the troubled corporations.
The construction industry is the worst affected by the collapse of the real state market. Time to regroup and rethink the strategy.
On the other hand banks are backing from allowing larger lines of credits since the risk of default is bigger now that business are on a downturn.
So those business that haven't yet file for federal protection called chapter 7 are hanging from a tread and there are many of them out there.
"The failure of a small business doesn't have to be a lifetime sentence for the owner," says U.S. Bankruptcy Court Judge Lewis Killian, in Tallahassee. "Bankruptcy gives them the ability to go forward, to start up again and be successful."
