Can Individuals Lend to U.S. Companies?
Question: I watched your presentation on the small business credit crunch on June 21. I have funds getting less than 1 percent interest and would love to lend to a robust, expanding business that needs cash. If I can lend to a sole proprietor in Nepal, why can’t there be a way to lend to this U.S. company?
Paul Solman: Well, SRC (the Springfield Manufacturing Company) is no sole proprietor. We’re talking about a multimillion dollar collection of businesses which we’ve featured twice in the past few months.
Proprietors in places like Nepal are the recipients of so-called “micro-lending,” featured on the NewsHour several times over the years, including a typically excellent report by Fred de Sam Lazaro that first ran in 2001 and again when the Bangladeshi economist it featured, Muhammad Yunnus, won the Nobel Peace Prize in 2006.
Micro-lending fronts small amounts to micro-businesses. As Fred put it in his report: Yunnus “surveyed 42 small business owners — fruit vendors, artisans, rickshaw pullers — and found that just $27 would free the whole group from debts to local money lenders, debt that kept them in almost lifelong bonded labor.” Granted, this was back in 1974, when Yunnus first got the idea and $27 went a bit farther than it does today. But not THAT much farther. Not SRC farther, that is.
It would be interesting to see a movement or institution devoted to making loans to the likes of SRC. But, come to think of it, that’s what banks are for. Makes you wonder, doesn’t it?