While economic conditions nationwide improved from October to mid-November, according to the latest Federal Reserve Beige Book report, the outlook for many small businesses is several shades darker. In areas of the country like Middle Tennessee, small-business owners nixed for a bank loan and maxed on their credit cards are pawning their equipment for the cash they need to keep the lights on. “Small-business people are actually pawning their working tools,” Isaac Haney of Dave’s Pawn Shop (seen at right) in Cookeville, Tenn., told the Cookeville Times. And they’re not unpawning them, Haney says. “Usually people come to pick up their stuff in two weeks. But now they’re struggling to make interest payments.” This is not a surprise, considering pawn shop interest rates, which in some cases work out to an annual rate of 500 percent. (Almost makes us want to go into the pawn business. But we have enough old TVs as it is.)
Pawn to rook no more? The stratospheric interest charged by pawnshops, which have risen 60 percent in the past year, have spurred lawmakers to write legislation to cap their rates. Pawnshop owners are so angry they’re steaming up their bazooka-proof glass. They claim the cap, if made law, will put many of them out of business and leave a large number of Americans with nowhere to go when they need cash.
You can take it to the bank. Or don’t. So how many people actually use pawnshops? A lot, says the first-ever federal survey of how people use financial services. The survey found over a quarter of American households are “unbanked” or “underbanked,” which means they don’t have a bank account or do but don’t use it. So how do they get paper money? Many go to pawnshops and check cashers.
How to bag a grant from Goldman Sachs. You may have heard that Goldman Sachs, in a move widely regarded as an effort to slacken the flak it’s getting for its behemoth bonus handout, has announced it will give $500 million in grants to 10,000 small businesses. The money will pay for business classes, mentoring and “growth capital available to small businesses in disadvantaged communities.” The $500 million is about 2.3 percent of the $21 billion Goldman will pay in bonuses this year. But if you can overlook that depressing calculation, you may as well get your piece of the $500 million if you can. Selection criteria have not been announced but you can learn more at the project website.
Workers to bosses: “Seeya.” If you can believe a recent survey by career-management consulting firm Right Management, a whopping 87 percent of U.S. workers could be looking for a new gig in the new year. Sixty percent of those asked said they “intend to leave” their jobs, 21 percent said “maybe, so I’m networking” and 6 percent said a career change is “not likely but I’ve updated my resume.” (And us? Sorry to disappoint you but we’re happy right here.)