Recession good for some
Payday loans have helped consumers before and during the current recession, and they will continue to be an emergency cash aid after it ends (Q3 2009?). America’s recession has darkened the doors of many businesses that couldn’t shoulder the burden of so much lost business. Or, if businesses don’t close outright, employee layoffs have been distressingly common.
However, not all small businesses have withered under the weight of the second-largest recession in American history. In fact, Stacy Perman of Business Week writes that “the recession has injected life” some small businesses that are doing well in spite of the downturn. In some cases, they may even be doing well because of it.
Consumers looking for value
Perhaps it’s to be expected that pawn shops and thrift stores have done well during this recession, as shoppers are looking to save money however they can. These kinds of stores have enjoyed higher business volume and a broadening customer base. National Association for Resale & Thrift Shops Executive Director Adele Meyer said that “More people are trying resale than may have done before. And once people shop resale they realize what value and quality they’re getting for the price. They become hooked, and this becomes their way of shopping.” The downside of this for these stores, of course, is that it’s difficult to maintain inventory during the traffic upturn.
Keep it running, keep it safe
According to Perman, auto mechanics and general repair stores have seen “record business in some cases” over the past half year or more. This indicates that more people than ever are looking to extend the life of the cars, appliances and tools they own, particularly in cases where repairs are significantly less expensive than purchasing a new one.
Unfortunately, as the recession causes some to resort to desperate measures, theft reports have risen. Thus, sales of home safes has been up and private investigators have found more work. Also unfortunately, desperate consumers who lose control of payments for homes, cars, boats and more have also found that repo men are out in force. Their business has, according to Perman, reached “record levels.”
Payday loans grease the wheels
Payday loans give many consumers the short-term bridge they need to make it from “Point A” to “Point B” during recession times. For some, payday loans can even be a way to temporarily pay down larger debt or bills to avoid expensive penalties. But spending as a whole is definitely down. This hurts most businesses, but for some little engines that could, recession greases the wheels.
Related articles
- Business Development Bank will get $350M injection, Clement says (cbc.ca)
- More consumers likely to seek help in 2009: debt counsellor (cbc.ca)
- Financial crisis: ‘iPod generation’ most at risk from credit crunch as one in five has £10k debts (telegraph.co.uk)
I’m certainly glad to hear that small business is being stimulated by the recession. Small businesses are an American tradition, and to see it continue to thrive should be a national priority. I hope the trend continues once the recession has passed.