Many small businesses are seeing hard times get even harder over the last few weeks. With credit markets tightening up, and even failing, small businesses are having an incredibly hard time getting loans to pay for goods, employees, or trying to expand. In August, (before the most recent crisis) 67% of businesses said that they have felt some effects from the credit crunch, up from 55% in February. The article talks to a handful of businesses from across the country reporting on the problems they have been facing as a small business owner.
After reading this article, and relating it to class there could be major negative effects of this. We have talked several times about how important new ideas and innovations are to our economy for continuous growth and efficient. If credit is harder to get for entrepreneurs, the ideas and innovations that someone might have and want to pursue could be difficult to get off the ground. Some of these ideas are the ones that change industries positively and help growth in the economy.
1 comment:
I thoroughly agree that with this credit crunch we can expect it much harder for smaller businesses to recieve the proper funding. We can also infer that a number of smaller firms will go under over the next couple years, or until our economy can recover. In terms of meta-ideas and technological advances, this industry I feel will have to slow down in some ways to allow the recovery and funding of the important components of the economy. The technological advances that will occur will be funded by the government, rather than individual entrepreneurs. The economy will essentially be slowing down for some time until it can recover to its original state, which could take several years or even longer.
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