The trouble with banks in an economic down-turn or a recession!

We all have read about the current crisis in the mortgage markets, especially in the US and here in the UK. This is based on the reckless behavior of many banks, driven by greed and not good business sense to lend money to house buyers who could not afford the mortgage. Needless to say small business will have to pick up some of the “tab”.

In the last few weeks I have received disproportional more emails with questions centering around banks demanding loans or overdrafts back, while the trading gets tough out there. It saddens me to read these stories of hardship, as you can read between the lines how much these micro businesses mean to my readers.

What I find especially upsetting is the fact, that banks often cancel these loans and overdrafts, not because the small business is doing anything wrong or different then before. No it is because they just need as much of their money back so they can fulfill their own obligations. What is different about this recession is that the banks caused this downturn in the first place.

Here is the thing, my readers are being told that they are a risk and therefor need to repay the money or simply being told to change bank. While the banks themselves are the ones who have behaved reckless and are the current risk for our economy. But what can we do about this problem?

Next time you need to buy a service or product have a look out for a small or micro business, support businesses like your own. ST.

6 Responses to “The trouble with banks in an economic down-turn or a recession!”

1. Robert Moore
   http://www.business-sale.com
   
   Said on February 8th, 2008 at 4:03 pm

   Neither a lender or a borrower be! This used to be advice on the extreme level. However, if you are involved in either you are taking on risks. It looks as if the banks didn’t manage or understand the risks properly nor in many cases did their customers…

2. Stefan Töpfer
   http://www.winweb.com
   
   Said on February 12th, 2008 at 3:55 pm

   Robert,

   The point is that we all take risks, but why should small business suffer because the bank has made mistakes, that is what is wrong here.

   Best of all often the customers believe they have done something wrong, which in some cases they have not!

   Stefan

3. Alby
   http://www.chrysalisfinance.co.uk
   
   Said on February 13th, 2008 at 5:55 pm

   I work in the finance market, and believe me it is volatile to say the least.The problem is that many banks have had american investment. The problem will get worse upto end of March because that is when most of these companies will be posting reports and the full extent of the losses will become apparant.

4. Alanr
   http://www.e-securedloans4you.co.uk
   
   Said on February 26th, 2008 at 12:30 pm

   The finance market works in the same as any market, it is cyclical.The market will improve and once a couple of lenders decide it’s time to re-enter the market, the others will follow

5. Alby
   URL=http://www.chrysalisfinance.co.ukSecuredLoan/URL
   
   Said on July 9th, 2008 at 12:57 pm

   The Finance market is taking a dive at present with the announcement of another lender closing it’s doors ( firstplus), i think we will soon start to see major problems with missed payments on credit and the like, since people will be unable to consolidate.

6. Alby
   http://SecuredLoan
   
   Said on July 9th, 2008 at 2:40 pm

   The Housing market is the main problem, due to the concern by surveyors, of property crashing, and therefore downvalueing property,this in turn causes more problems for homeowners due to the fact that lenders are unwilling to lend over certain LTV’s. It is looking very bad for many. This will then impact on other sectors such as manufacturing, since people will have less disposable income to purchase. It is a vicious circle.

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