Reverse Mortgage lenders come in all sizes, big and small. Therefore what is happening to small businesses given the recession concerns the industry at large. The Wall Street Journal published an article on the effects of the credit crunch on small businesses. Needless to say, the picture wasn’t pretty. Since the recession began, credit card companies have been cutting credit lines and raising APRs and minimum payment fees. Credit cards are the most common form of small business loan, and these cut backs have had an effect. The number of businesses filing for business bankruptcy is higher than the number of individuals filing.
This does not mean that small businesses cannot flourish during the recession; many are doing quite well. However it does mean that expenses may be tighter for some of the smaller reverse mortgage companies this year. From an industry perspective, continuing to have small lenders is a positive thing. The increase in competition is healthy for any business, as is the prevalence of loan officers scattered throughout the country, convenient for seniors everywhere. Reverse mortgages have been flourishing, and hopefully this diversity does not fade.
From a consumer point of view, the increase in financial trouble for small businesses has led many individuals to look into reverse mortgages. In some cases, it can help seniors raise the funds they need to keep their business.