Small Business Loans With Bad Credit

Helen asks…

What’s Really Going On With the “Bailout”?

I’m reposting this to give out some facts about the “Bailout” (incorrectly named – It should be Rescue plan because it is SO misleading)

The Bailout is in no way shape or form a negative thing. There are two very important distinguishing comments I have to make about this subject. THIS IS NOT A BAILOUT, the reason why this wasn’t passed the first time it was brought in Congress was because it was sold to the public in a terrible way. The $700 Billion dollars are NOT going to be put to use to save more major companies and banks. Secondly, THIS IS NOT SPENDING. The money that the government has put forward to this idea IS AN INVESTMENT.

The Idea behind the plan is to free up the credit market by buying the bad mortgages from all these banks and major corporations (as well as the individual investors) to alleviate the fear of lending among the banks. What’s going on now is that no one can lend money because there is an unstable fear among the banks that believe that no one is capable, nowadays, to pay back their loans. The idea behind the INVESTMENT (Not Spending) is to free up this market so that people may loan again and expand their small businesses and to purchase a house perhaps.

Now for the investment part of this question. This is Not Government Spending. This is taking the tax money of the people (approx. $2,000 per person in the USA) and putting it towards buying assets (The Bad Mortgages) to free up the markets. These assets ARE WORTH SOMETHING, they’re not pieces of paper that will be worth nothing when the government purchases them. The idea is to get the money now to buy these assets, free up the markets, and when they are worth enough to sell back into the market the government will begin to sell them (They may even make a profit like the RTC did in the ’80s). The money that the government makes is hopefully and purposefully going to be given back to the taxpayers in the form of tax relief.

The whole matter is who needs the money, how much, and when. Wall Street is not getting a free pass from this, they will pay. The idea is to prevent the taxpayers from paying for their mistakes, and frankly the only way to do that now is to work with the Financial sector of the economy (specifically mortgages and the credit market) to allow the commonpeople to make loans.

Without this government intervention I guarantee a nice old Depression, we all know how successful that was… And another thought. How did we get out of that Depression? Oh yeah, World War II, I hope that’s not the only way to get out of Depression, another World War *sigh*.
“The Banks will be tighter than ever with their money, and will not be any more likely to extend loans to the ordinary consumer than they are today. You said it yourself- “there is an unstable fear among the banks that believe that no one is capable, nowadays, to pay back their loans“. Does this plan change that? No.”

There has to be a compromise between the excessive loaning of yesterday (i.e NINJA loans) and the restricted loaning today (i.e frozen market). You can’t expect everyone to get a loan and I do believe that there will be more restrictions on getting loans but at the same time you cannot consider the countless people who loaned what they could not pay back a loan. The reason is because that produces incorrect statistics. The other day we believed that anyone and everyone could loan however much and whenever they wanted to. That has to change now and this is the unfortunate lesson we have to learn through the hard way.
To go along with the faith of the financial institutions we have to take into account the human species. There are so many deceptive people in the world, let alone in the USA. You can argue that it wasn’t these financial institutions that created this mess, I mean the source of these bad loans are the banks, to go beyond that we can track it individually to the people of the USA. The people who took out loans they could not pay. It’s one of those group consequences in which the wrongdoings of one produces a group consequence unfortunately.

Socialism, I prefer to think it’s far from it. What the government is doing is investing tax money to stabilize the economy not to take control of the economy. So far all I have seen is attempts to take over businesses and liquidate them, no private enterprise has been taken over for government production, it’s being liquidated. Without ANY government intervention we will all end up in a shit-hole, whether you invest or not.

admin answers:

Tommy, This is Socialism is what it is. The government is bailing out companies from the failures companies are reaping from their own poor decisions. How is that free enterprise ? When a company invest they take risk. The risk is that your choice of investments can bring on poor financial consequences. They are reaping what they have sown. Further more. The congress of the United States is there to represent the people. And the people have said NO to this bailout. You can play Freudian word manipulation games if you like by moving from calling it a bailout to a rescues plan if you like. The bottom line is. The Top dogs who placed us in this position to begin with are going to benefit from this. I am all for business and making money and a Ronald Regan Rush Limbaugh republican. But this is wrong. Regardless of what consequences those who want it believe it will avoid.

George asks…

why do credit cards cancel on you if you have credit issues elsewhere?

So up until I was laid off in 2008 from a full-time job, I had near perfect credit. I always always always paid my biills on time and was seldomly ever late for any of them. I had a few credit cards. I have/had a MasterCard, a Kohls card, a Old Navy card, and another card from my bank that I never used or even activated since the account was only for overdraft protection.
Keep in mind I have/had a near perfect record with MasterCard since like 2002. I ALWAYS paid my balance off in FULL not just on that card but any card I used I always made a habit of paying them off in full.
So everyone knows that the only way to apply for jobs these days is via computer. Well my motherboard on my computer went bad so I had to buy a new laptop so I opened a Best Buy Credit card. During that time I also had a TEMPORARY contract job and thought I would be able to make the payments. Well about a week after I had charged the amount to the card, wouldn’t you know that my contract temp job ended early. Then to top it off I had also during that time charged a small amount to my Kohls card thinking I”d be able to pay it off — needed clothes for that job. Well keep in mind that was like last August. Well when the contract ended earlier than it was supposed to, I was stuck with two bills I could not pay. Unemployment benefits only pay out so much. So I had to prioritze my bills. I paid the things that had to be paid like my car payment, student loans, insurance, cell phone (I have the bare minimum no frills cell phone plan and it’s the only phone I have) and groceries — I applied for food stamps but was told I made too much on unemployment benefits. This pretty much left me with nothing left over to give to the credit card people. I paid them a few times when I had a little left over but those payments were far and few between. So I mean when you don’t have money to pay even the bare minimum on cards you just don’t have the money. And I tried to tell those companies that I was unemployed and asked for help and all they wanted to do was put me on some type of payment plan even though I tried to tell them I did NOT have any left over for that. So I mean they just didn’t get paid. So I mean I can understand those particular companies not liking me. But what I don’t understand is why other companies have to stick their nose in your business and close your other cards that you didn’t even have problems with. My bank closed my card with them that I have for overdraft protection and have never ever even used it for that or anything else. Will Mastercard close on me next? It’s like I have a perfect or near perfect history with them by themselves (both the bank and mastercard), but my credit got messed up by Best Buy and Kohls. Why should the bank and/or mastercard even care? My debt is NOT with them. I don’t understand. I mean yes I know I didn’t pay Best Buy and Kohls like I should have but you can’t squeeze blood from a turnip. I mean shouldn’t they look at my past history and see that the only reason my accounts went delinquent is due to falling on some hard times? I know the simple solution would be to get a job. And TRUST ME I am looking but I’m not getting any phone calls back for interviews. Any explanation as to why credit cards that I didn’t even use are closing on me based on a couple other cards would be appreciated. Thanks.

admin answers:

I don’t know why yours was closed, but I do know that some credit cards close automatically it they are unused.

Some advice. Add some comments to your credit history explaining this situation, it will help. Also call back the places you interview at, some companies see it as a sign of initiative.

Best of luck with the job hunt.

Linda asks…

What business can I start?

I’ve worked in offices for 7 years now, two at Jackson Hewitt, three at Countrywide Home Loans, and two at Bank of America.
I did taxes, home loans, and foreclosed property management.

Not a one of them did I enjoy.
I dropped out of college so I don’t have a degree.
My credit is torn up to say the least because of several bad decisions in my youth.
I have no skill sets or passions for anything one my refer to as a skill. For example say: cooking-restaurant Business, marketing – marketing firm, or knowledge of law – attorney.

The plus side-
I’m young so I still have time to change things.
I’m smart or at least I learn quickly.
I’m hardworking when I enjoy it or want to be.

Things I’ve considered:
-Opening a bar and or bar restaurant- I love to talk to people. I could see myself being a bar tender and running a small to medium sized bar with regular locals.
-Opening a body shop- My best friend has done body work for 10 years and tried unsuccessfully to start his own body shop. He has skill but no knowledge of business.

I’m pretty much open to anything though

admin answers:

Good for you for wanting to be your own boss. The challenges I see of opening a Bar or a Body shop is your lack of capital. You would most likely need a loan and with your credit having some blemishes you know that’s not going to happen. Although I’m a firm believer that if that’s what you really want, then you can find a way to make either one happen. The issue I have with the body shop is your friend has the skills you don’t. What if you have a fight. And he refuses to work on cars. Then what.

The Bar has lot’s of risk, and lots of start up $. Again not sure were you would get the money to pursue this.

From what you write, you need to get into something that helps people first. Your a problem solver. I feel you want to help people but do not want the walls and restrictions that a traditional job might be placing on you.

Not sure if you ever considered Direct Sales or not. But I feel it would give you the freedom to be your own boss, low start up, and the ability to help people and make a good income. You can take a leadership role and help train people as well. If your curious then get in touch with me. I may have a fit for you. Good luck

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