The Fed believes that holding interest rates low fosters business growth, hiring, and bank lending?
So why isn't that happening? I have discussed many reasons, but today I have another one from Steve H. Hanke, Professor of Applied Economics at The Johns Hopkins University who discusses The Federal Reserve vs. Small Business.
A key scheme to encourage banks to ramp up their lending has added fuel to the housing market but has so far failed to ignite lending to small businesses, according to the latest data from the Bank of England, reports The Guardian.
Canadian banks have more loans out to Canadian businesses than ever before thanks to low interest rates and business owners hungry to grow.
At the end of November, the banks had $326.7-billion in loans to businesses on their books, up 9% from the same period last year, according to the Bank of Canada.
The banks themselves are no doubt pleased, but as an indicator of what to expect from the economy over the next few months the number is even more important, suggesting business owners may be in a hiring mood.
Peer-to-peer (P2P) and peer-to-business (P2B) lending are becoming an increasingly common choice as a source of raising the necessary capital to get projects off the ground and expand a business.
But according to the 2014 Nesta Report, only 44% of SMEs have even heard of P2B lending, let alone tried it.
What is P2P or P2B lending?
Peer-to-peer lending is essentially just another way of getting a loan, but instead of a bank being the facilitator, the investor of the loan is an unrelated individual known as a peer.