Entry bubble The Pitfalls of Payday Lending

By: Nicole | August 22, 2008 | Category: Money

CashThe Gov Gab comment box has recently been flooded with spam promoting payday loans. Fortunately, we don’t post spam, but these messages gave me an idea for today’s topic.

If you gather more than five consumer advocates in any one location for more than five minutes they will commiserate about the pitfalls of payday lending. For cash-strapped consumers, a payday loan is one of the most treacherous ways to borrow money.

Here’s an example. A person borrows $100 until payday. The lender charges $15. The borrower cannot repay the loan on time, so the loan is "rolled over" for another two weeks with an additional fee of $30. Already, this person has spent $45 to borrow $100, and the borrower is not out of debt yet.

Most payday lending models actually intend to keep the borrower in debt indefinitely. More than 90 percent of these loans are given to borrowers who use more than five payday loans per year.

Payday lending is illegal in some states. Use this map to determine if your state has laws that protect you from payday lenders.

If you find yourself short on cash, look for alternatives to payday loans.

For more information about managing debt, read our publication on Financial Fitness.

Have you ever been solicited by a payday lender?

| View Comments [20] | envelope E-mail This Entry | Tags: bankruptcy   debt   finance   lender   lending   loan   loans   money   nicole   payday   predatory_lending  

 

Entry bubble Owning a Small Business

By: Nicole | June 27, 2008 | Category: Money

I firmly believe that one of the most rewarding pleasures in life is a terrific story. I recently finished reading a new book by one of my favorite writers. His latest novel is set in a small town in upstate New York, where a struggling, painfully optimistic family man purchases a small corner grocery. With much help from his savvy, less optimistic wife, he makes a successful business of it. As I was reading the story, I have to admit that I was inspired by the powerfully American idea of a small business venture.

Business OwnerIf you have ever imagined owning your own business, check out the Small Business Administration’s website, where there are tons of resources to help an entrepreneurial spirit. There, you can find detailed instructions for writing a business plan or information about finance options. Did you know that there are laws governing what you can name your business? You can find that and much more on the site.

There are also free online courses offered through the site. For example, you can take courses about starting a business, managing a business, financing a business, or marketing and advertising. The courses are interactive, engaging, and accessible. If you’re interested in a small business but feel intimidated by the process, these courses will definitely help.

In addition to the resources above, you can get help at the Small Business Administration’s district offices or at a Small Business Development Center in your area. You might also benefit from the Federal Citizen Information Center's related publications.

And for businesses of any size, USA.gov's Business Gateway provides all the government information you need.

Have you ever been inspired by a terrific business idea?

| View Comments [8] | envelope E-mail This Entry | Tags: business   capital   enterprise   entrepreneur   finance   manage   money   nicole   opportunity   own   start up