'The Truth Behind The Jobless Recovery': Startups Can't Find Funding

[marmar]

from HuffPost:



Even as the nation lacks the jobs to employ millions of workers, one crucial source of job-creation is being squelched: New businesses, which, according to a new study, contribute a fifth of the nation's new jobs, often can't get off the ground.

After years of lax lending policies contributed to the worst economic downturn since the Depression, banks, which offer businesses the loans they need to get going, have adopted stricter standards. But this newly conservative climate, necessary in some ways to prevent another crisis, is also helping to stall a recovery. With banks less willing to take risks, would-be entrepreneurs are hitting a wall. The close relationship between banks and business owners, which drives the economy forward in good times, now poses a threat to recovery.

As a means of healing the national unemployment rate, now at 9.4 percent, business-creation is essential. New businesses contribute a full 20 percent of new jobs, despite the fact that those jobs constitute only 3 percent of the nation's total job pool, according to a study released Tuesday by Bank of America Merrill Lynch, entitled "The Truth Behind the Jobless Recovery." Without new businesses being formed, the rate of job-creation will remain painfully slow.

"Banks are being much more picky," said Sam Thacker, a partner at Austin-based Business Finance Solutions. "A start-up is going to have to prove that they have domain expertise in the field that they're trying to start a business in." ...........(more)

The complete piece is at: http://www.huffingtonpost.com/2011/01/12/new-jobs_n_807711.html

[Dappleganger]

1. K&R

[hobbit709]

2. what kind of recovery doesn't include jobs?

Giving bonuses to themselves on Wall St does not a recovery make.

[progressoid]

3. That's just silly.

Everyone knows that wealthy create jobs and they trickle down to us via their glorious job holes.

[leftstreet]

4. K&R