Oftentimes, small business owners are unable to obtain reasonably priced financing and instead turn to higher priced forms of capital, such as credit cards.
Sentiment: NEGATIVE
Small- and medium-sized businesses need access to a diverse range of finance options, including non-bank lending. These new forms of finance are still small in scale today but they should, over time, bring additional choice and greater competition to the lending market.
The lack of available credit and loans is having a severe impact on small businesses in particular, but also their suppliers and the bigger companies too.
Small business owners that are female, that is their number one problem, is access to capital.
In October 2008, when the credit crunch hit, small businesses were really crushed by the lack of capital.
Most small-business owners have no financial education when they started. They weren't trained to be entrepreneurs.
Financing is tough, and you really have to work hard in the businesses you invest in.
Many businesses fail because the owner wasn't willing to invest and wasn't educated on the difference between spending money frivolously and investing money into the business for growth, and the risks and rewards of that cash infusion.
Our experience is that most entrepreneurs are able to attract debt, even for risky and early stage investments. There are investors who provide debt, but very few who fund through equity.
As a small business owner, I've had to find ways to keep costs as low as possible while still providing customers with the ability to use their credit cards for payments. Many credit card processing companies are so expensive when it comes to fees that it started to feel like a losing proposition to offer this payment option.
You know, when the cost of capital goes down, when credit becomes cheap, people start taking greater and greater risks.
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