Small Business Loans Taking the Lead for Securitization Signaling Another Bubble

Small business owners should think about what happened to homeowners when they failed to get advice of counsel and failed to get advice from a financial adviser. Millions of homeowners lost their homes, their reputation and suffered permanent damage to their financial identity. Many ended up in divorce, suicide and stress related illnesses.

The pressure from the lender to accept more and more money based on fewer and fewer indicia of viability of the loan says that the loans are intended to fail. It might seem like a good idea, but it isn’t. Free money is never free.

You better look this gift horse in the mouth because this is no gift and that it isn’t a horse.

If it matters to you that your name, signature and reputation are in the process of being sold, resold and traded on the open market then you might want to take a step back from the proposed loan. Look for an established community bank that is actually underwriting the loan for performance — thus protecting both borrower and lender.

Between the residential loan bubble that still exists and is again growing, the student loan bubble that nobody wants to deal with, and now the small business loan bubble it is hard to imagine a scenario where another crash is not imminent leaving borrowers and the investors in the lurch AGAIN.


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