Testimony of Spencer Cowan before the Senate Financial Institutions Committee. In this testimony Cowan discussed the lack of access to capital for many small businesses in Illinois and the prevalence of online-predatory lenders.
small business lending
Presented by Spencer Cowan at the Illinois Senate Hearing on small business and and impact of predatory lending.
Early next year, J.P. Morgan will start using online lender On Deck Capital Inc. to help make loans to some of the bank’s roughly four million small-business customers. On Deck Capital, which has extended as much credit in its eight-year history as J.P. Morgan does in a few months, will help the bank process applications more inexpensively and quickly, in hours instead of weeks.
In part because large banks are not meeting the credit needs that neighborhood businesses have for small loans, a new breed of lenders has emerged, operating online, in a space that is virtually unregulated, with some engaging in the same kinds of predatory practices that characterized the small dollar consumer lending space a few years ago. They provide fast access to capital, but frequently the loans have very high interest rates, hidden fees, and allow the lender to take money directly from the businesses bank account, sometimes on a daily basis. As a result, business owners
While the impact of biased investment advice in the college savings arena is very troubling, the impact of biased investment advice is even more concerning in the area of retirement savings. The lack of a fiduciary standard for retirement investment advisors costs consumers $17 billion a year in unnecessary fees to manage 401(k) and other retirement funds such as Individual Retirement Accounts (IRAs). The Obama Administration and U.S.
While some entrepreneurs can rely on home equity or other personal assets to get their businesses off the ground or navigate through a rough spot, the housing crisis — and the resulting glut of underwater homeowners — cut off that path for many businesspeople, particularly in communities of color. That means that entrepreneurs are relying more heavily on traditional bank financing, such as business loans, credit cards and lines of credit, in order to stay afloat or expand.