View Poll Results: Should the US government do more to help people become small business owners?

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Thread: Should the US government do more to help people become small business owners?

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    Re: Should the US government do more to help people become small business owners?

    The U.S. government stay out of the f*cking economy...completely.

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    Re: Should the US government do more to help people become small business owners?

    Quote Originally Posted by MildSteel View Post
    '

    So what did you mean exactly when you said that a small business loan was one of the hardest for a financial institution to make? I would be interested to know exactly what makes it so hard, of that is indeed the case.
    Because the SBA has to approve the loan and accept the loan. The paperwork is a nightmare. The process is a nightmare. The effort is burdensome.

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    Re: Should the US government do more to help people become small business owners?

    Should the US government do more to help people become small business owners?
    yes. by preventing more supermergers and by breaking up more anticompetitive monoliths.

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    Re: Should the US government do more to help people become small business owners?

    Quote Originally Posted by MildSteel View Post
    In an ideal world they should not be. But obviously we are not in an ideal world and the government does indeed engage in guaranteeing and making loans to businesses. And I'm saying that since that is the case, they should do more to make it easier for people who are trying to start a small business to get financing. If the banks won't do it, the government should step up to the plate.
    We need banks and lenders to be in the lending business. NOT the government. Taxpayer money shouldn't be loaned, the government has no clue about lending (obvious from their regulatory "efforts"), and the risk is far too big.

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    Re: Should the US government do more to help people become small business owners?

    Quote Originally Posted by ttwtt78640 View Post
    Credit risk analysis requires expertise and having skin in the game. The failure rate for small businesses is my concern, as well as nonsense like "minority owned" or "enterprise zones" being a consideration when choosing who "deserves" our (the taxpayers) special help. I have serious doubts that a DC bureaucrat knows more about any local small business operation's chances of success than current area banks/credit unions do.

    Startup Business Failure Rate By Industry | Statistic Brain

    Why Small Businesses Fail: Top 7 Reasons Startups Fail and How to Avoid Failure
    I agree, the failure rate for small businesses is a concern. That's one reason why I was thinking that with my inventory loan idea, it should start small and grow as the business becomes more credible and demonstrates an ability to repay. As far as the DC bureaucrat goes, the government can hire people with business experience and who are familiar with local conditions to help make assessments. Sure, it may be difficult, but I think it's possible to do in a reasonable manner if thought out properly.

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    Re: Should the US government do more to help people become small business owners?

    Quote Originally Posted by ttwtt78640 View Post
    You attribute the failure of Solyndra to gov't actions (tax policy) while wishing the gov't to invest "wisely".
    No I did not, I attributed it to having to compete with Chinese manufacturers who typically can produce items at a lower cost and can therefore sell them at a lower cost. What I did say is that the government can do various things to make up for the various disadvantages that US companies face in that respect. That is different than attributing the failure directly to government policy.

    Quote Originally Posted by ttwtt78640 View Post
    Much of that Solyndra revenue was due to gov't provided incentives (tax policy) that made no mention of the country of origin to qualify for those credits.
    That's interesting. I did not know that. Do you have a source for that? One thing about Solyndra is that had some sort of cylindrical design for their panels which they claim eliminated the need for the panels to track the sun. It would seem to me that it would be more costly to manufacture such panels as opposed to flat ones, regardless of where they were manufactured. I really don't know if the savings due to increased efficiency, assuming that they were more efficient, justified the cost, or if people really felt that paying more for them was worth the increased cost.

    Quote Originally Posted by ttwtt78640 View Post
    Once we start allowing the gov't to give tax preference to its own business investments then we are firmly into crony capitalism.
    That is a very strong point, and you are exactly right, that is something that would surely be abused. That said, perhaps the proper oversight could insure that the risk of abuse would be minimized. I need to think about that more. Good point!

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    Re: Should the US government do more to help people become small business owners?

    Quote Originally Posted by tres borrachos View Post
    Because the SBA has to approve the loan and accept the loan. The paperwork is a nightmare. The process is a nightmare. The effort is burdensome.
    That is a shame. It sounds like that is an area that someone should devote some resources to trying to figure out a way to streamline the process. Part of the problem with government bureaucracies is that bureaucrats spend quite a bit of time trying to figure out how to cover their butts, as opposed to the task at hand. I bet a lot of that red tape is a result of that.

  8. #38
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    Re: Should the US government do more to help people become small business owners?

    Quote Originally Posted by MildSteel View Post
    I agree, the failure rate for small businesses is a concern. That's one reason why I was thinking that with my inventory loan idea, it should start small and grow as the business becomes more credible and demonstrates an ability to repay. As far as the DC bureaucrat goes, the government can hire people with business experience and who are familiar with local conditions to help make assessments. Sure, it may be difficult, but I think it's possible to do in a reasonable manner if thought out properly.
    That involves too much power for the gov't to use social justice, social engineering or just plain old pork barrel politics. After all we have "interstate" highways in Hawaii just to be "fair". We tax wages to subsidize out of wedlock childbirth and then express shock at the results of that insane policy Nearly the same thing could be accomplished at the state/local level using tax breaks (like NY is now doing) to encourage business start-ups..
    “The reasonable man adapts himself to the world: the unreasonable one persists to adapt the world to himself.
    Therefore all progress depends on the unreasonable man.” ― George Bernard Shaw, Man and Superman

  9. #39
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    Re: Should the US government do more to help people become small business owners?

    Quote Originally Posted by MildSteel View Post
    '

    So what did you mean exactly when you said that a small business loan was one of the hardest for a financial institution to make? I would be interested to know exactly what makes it so hard, of that is indeed the case.

    startup loans payback history is atrocious

    most small businesses (well over 50% ) never make it to year 2

    why the loans are hard for banks/credit unions to make is easy

    1. no history of company
    2. usually very little planning documentation
    3. no pro forma
    4. most borrowers have little private equity, so hardly any collateral
    5. poor credit history of owner on personal credit

    those are all valid reasons NOT to give loans for small business

    that is why a lot of people put second mortgages on their house, borrow from friends/family, or try to find investors

    my daughter just got her SBA loan granted....

    it took 8 months.....and a lot of help from me on getting her to do all the planning docs
    “Most of the shadows of this life are caused by standing in one's own sunshine.”

    Ralph Waldo Emerson

  10. #40
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    Re: Should the US government do more to help people become small business owners?

    Quote Originally Posted by MildSteel View Post
    That is a shame. It sounds like that is an area that someone should devote some resources to trying to figure out a way to streamline the process. Part of the problem with government bureaucracies is that bureaucrats spend quite a bit of time trying to figure out how to cover their butts, as opposed to the task at hand. I bet a lot of that red tape is a result of that.
    I could not agree more. It is such a bureaucratic nightmare that in the end, the banks & credit unions just don't do it. When that happens, credit dries up. If they could remove some of the barriers, I would almost guarantee that it will pick up. We need our small businesses to be able to grow and thrive.

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