Today, in virtually every corner of the country, well-meaning bureaucrats will hand out money to people who shouldn’t have it. They claim they are offering a lifeline, but more often, it is a noose.
I’m talking about the network of community-lending programs and banks that hand out six-figure loans to new entrepreneurs who provide a business plan and pledge their house (and often that of a cosigner) in return for a start-up loan.
More often than not, those lenders end up saddling applicants with more debt than they need or can afford.
Capital is not the scarce resource that new entrepreneurs need.
The first of many tests of a true entrepreneur is the ability to make something out of virtually nothing. When Aaron and Michael Serruya decided they wanted to set up a frozen yogurt store, they calculated their start-up costs: They needed retail space in a tier-one shopping mall, signage, industrial refrigeration units and inventory, among other things. It all added up to more than $100,000.
To read the full, original article click on this link: Beware the Entrepreneur’s Debt Trap | BNET
Author: John Warrillow
