I often focus my blog entries on American business topics. This is easy to do for several reasons, the first being that I am American and live in America where the majority of information I get deals directly with United States companies. My experience has also been primarily in dealing with American companies. However, it’s also important to note that the American economy has a major impact on economies the world over, many of whom are invested in us or rely on our product ion in some fashion. The crash precipitated by people on Wall Street had just as much impact on traders in the City or on the Nikkei.
What I found fascinating to read, however, was this article over at bizcovering.com about how UK entrepreneurship is in trouble because of this. Now, American entrepreneurship is also on the rocks, but consider for a second that before the crisis it was already more difficult to get money in the UK. I don’t mean to say this in an offensive manner, but UK lenders tend to be more conservative than American ones to begin with, not the least reason because of a culture that has promoted thrift as a major social virtue from time immemorial. Finding startup capital was already a struggle, let alone the capital to actually maintain a business through the first couple of years.
And it’s that first few years that seems to be the clincher. Several small businesses have been able to get startup capital, many before last October, but are now finding that they have their lines of credit cut short, have their debts called in early, or simply won’t be extended new loans to continue their business despite an initial plan to do exactly that when the first loans were approved. The liquidity exists to support these business, but the will to spend it has been cut abruptly short, exacerbating a pre-established tendency to not loan money.
I hope that with the bouncing of the US economy that UK bankers will start to lend again. In a world economy it’s important that new ideas come from everywhere. Part of that means that within nations everybody encourages smart investments and don’t get gun shy when it comes to lending money. The only way out is through.
