The Fall of a Real Estate Giant

The small business

The installment loan could be the answer to a small business’ financial woes. In today’s economy everyone is feeling the cash crunch. With unemployment rates at an all time high and the housing market crashing, businesses are hard-pressed to bring in customers. Whether or not funds come in, debt needs to be paid. An installment loan can help businesses by extending cash when it’s needed. It is worth a look when the end of the month is looming and break-even points are nowhere to be seen. A simple application process and speedy review are both selling points of the installment loan. Sometimes it is the most viable option to save businesses from defaulting on payments.

The economy and a real estate giant

On April 16th, the second-largest U.S. mall owner, General Growth Properties Inc, filed bankruptcy, making this the largest real estate failure in economic history. The company is trying to refinance their debts, and more than 200 retail malls throughout the U.S. are involved in the mess. When a business conglomerate as large as General Growth Properties Inc. takes a fall, it affects a lot of other entities in the market, such as the employees, creditors and financial institutions.

Who is General Growth Properties Inc.?

General Growth Properties Inc. has been a staple in the American economy since 1954, when two brothers joined together to build a shopping center in Cedar Rapids, Iowa. From that time, they began buying buildings and malls and expanding their property empire in the retail market. During the real estate boom, the company aggressively bought properties with the intent of being the biggest retail corporation in the U.S. The acquisition of new properties created wealth, but also meant that the company was increasing their debt. Roll-over financing for businesses is common, but when lenders stopped extending funds last fall, General Growth was left without an option to pay its debts. Chief Executive Adam Metz stated, “We have worked tirelessly…to address our maturing debts, the collapse of the credit markets has made it impossible for us to refinance maturing debt outside of Chapter 11.”

The economy and the average business

If long-standing retail giants are feeling the economic strain, then small businesses are in the same precarious positions. Installment loans can sometimes save a business from missing payments and damaging their credit. As the unemployment rate grows, more and more Americans are holding tight to their money and putting spending on hold. Even people with jobs are being cautious about where their money is going and looking for the best deals. This puts many retailers in danger of closing if budgets are consistently not met.

Unfortunately, in past years companies were more than willing to lend money to businesses for various reasons. Because the economy took a drastic turn in mid-2008, those same businesses were left with huge debts and nowhere to roll it over to. Short of filing bankruptcy, retail outlets have to find ways of maneuvering the murky waters of a grim economy.

Installment loans as the small business answer

Because of the growing popularity of installment loans, the process for applying has been simplified. Lenders are willing to take applicants’ information and do the best they can to help them out of financial struggles. If large corporations are filing bankruptcy, small businesses also need some drastic measures to make ends meet and pay down debt. Until the bailout and other governmental solutions trickle down to the small business, they are going to have to continue to budget limited funds wisely.