The lack of credit from banks was a complaint of two small business owners. The Federal Deposit Insurance Group reports that loan balances to small businesses fell in the first quarter of this year (while loans to big businesses increased). But it’s even worse for small businesses in other countries. Headlines say that small business lending from Spain’s crumbling banks is drying up and in England 50 small businesses are failing daily due to lack of lending.
We don’t know how successful these new alternatives to traditional financial institution lending will be for small businesses. Crowdfunding is a novel and not understood concept for most small businesses. So the results of a recent national poll finding that 45% of small business owners not knowing if crowdfunding would be helpful and 53% not thinking it would is no surprise.
With small businesses creating at least half of the net new jobs in this country, we shouldn’t be letting the vital growth of these real job creators up to the whims of family, friends, and credit card companies. We need crowdfunding and other alternatives sources of capital if banks won’t or can’t do the job.