business

Yeah right ...just make banks look bad like that.

Also, notice how "nonprofits and governmental programs" are talked about "working in tandem" ...trying to paint banks as "(expletive) greedy" compared to "a government that 'cares' ".

C'mon people ...we keep thinking like this ...and the economy WILL remain at $0.00.

Try banking in an environment where you are getting mixed messages. On one side we have the gov't saying "Lend! Lend! Make loans to small businesses to get us out of this mess" and the other side saying "We are regulating banks more so that we don't get deeper in trouble." That in addition to the surviving banks bailing out the failed ones really puts banks in a hard spot.

My bank pays 1/4% interest on my money and charges 10% - 30% on its credit cards. How about the millions and millions to the banker CEOs? Of course, if anything goes wrong along the way like a banker losing money they are the first to get bailed out by the government. Are we not sick of the bankers yet?

My first question is why was this business given the contract when they obviously didn't have the equipment to fulfill the work. There has to be a lot of contractors out there that already have equipment sitting idle that could do the work. This was a poor example to use for lending.

It has to do with Risk.

Sure the bank gets 30% on it's credit cards ...but is it 100% guaranteed payments each and every month (I doubt it)?

1/4% probably is the "maximum" interest rate your bank could GUARANTEE pay you ...counting all the risk.

Putting it another way ...the bank could probably "pay" you more ...if you accepted 10% interest during one month ..and LOSING PRINCIPAL during another month. Would you accept that?? I'd bet not ...most people would probably SCREAM if the principal "could" possibly GO-DOWN. NO ..we want GUARANTEED BALANCE GO UP UP UP. Thus ...the maximum interest to keep that guarantee ....is 1/4%.

That's how a lot of businesses grow and expand by taking a little more work. If it is managed well, you have growing business.

...."while default rates generally run 4 to 10 percent, which is higher than most banks"....

Banks are getting hammered from all ends for making loans with lesser default rates. And yet our government tag teams with non-profits to make even riskier loans and gets a pass from some posters on this board as well as the Strib? When these loans go bad and, we the people, have to pony up to pay the tab, I'm betting that these same posters will still blame the banks rather than the entities engaging in the riskier lending practices.

you want business, you stump for it. you get a great offer, you take it. the contract then becomes collateral for a short-term loan. that's how most business works -- or did, until bankers selling each other bogus loans with fanciful guarantees that ended up based on the loans themselves crashed the credit system.

Thanks Dee for another interesting and informative article. We do not see your by-line near often enough these days (hint-Star Tribune business editor).

are a real source of amazement to me. I had a Discover card for 9 years and had ONE late payment (the late fee was even refunded). My credit score was "average" over those years, and I never once went over the limit. Yet, my interest rate was never once less than an average of 14%. When I decided to work on getting out of debt and asked for help in negotiating the payments, Discover told me too bad (this was in 2004). I signed up with LSS and made payments faithfully for 2 years. When I lost my job and couldn't make the payments, LSS and Discover said "too bad." I will be filing bankruptcy in the coming month. Guess the lawsuit they just filed doesn't mean much to me. And yes, I paid every penny borrowed back to them with interest. The only thing they want now is over $5,000 in interest. I'm a responsible and intelligent person, yet I feel used by the credit card companies. Believe me, this is one mistake I won't be making again and am actively working with my teenage son to ensure he doesn't make the same mistakes.