How Personal Guarantees on Small Business Loans May Hurt the Economy

Professor Yoko Shibuya argues that expanding loan contract options for small businesses could boost their performance and reduce social costs

The availability of credit can make or break small businesses, who generally lack an established credit history and don’t have enough collateral to pledge to the bank. Faced with financial scarcity, owners or managers are often led to personally guarantee their business loans, risking their personal assets, such as homes and… read more