Since 1975 the growth in Credit for Corporate and Non-Corporate Business has been about the same. During the Great Recession they strongly diverged and have not come back together.
Interesting for Corporations the slowdown in credit growth this time around was about the same as the dot-com bust and the recovery occurred earlier.
For non-corporate business the dot-com bust was a slow motion decent that never went very deep. This time around it was free fall and we are still not back above zero.
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Friday ~ September 30th, 2011 at 11:50 pm
tjic (@tjic)
Pardon my denseness, but what is a non-corporate business?
Saturday ~ October 1st, 2011 at 12:47 am
Karl Smith
A partnership or a sole proprietorship.
There a lots of legal classifications but the three core classes of business are
1) Sole proprietorship. The business is simply an extension of the an individual’s personal accounts. You personally own all of the business equipment and owe all of the business debt.
2) A partnership. The business equipment and debt are owed according to an agreed upon split and the profits are paid out based on an agreed split.
3) A corporation. The business is an entity unto itself with its own debts and liabilities. The owners own shares of the business and vote for the board of directors. Profits may or may not be paid out to the owners as dividends.