For some businesses struggling to survive, unable to obtain a bank loan turning to a subprime lender might seem like a good idea. The feeling that a bit more cash will turn things around can be emotionally powerful especially in contrast to the stigma of declaring bankruptcy. However, as these articles point out there is a significant risk to using a subprime lender.
When the desperate need for cash arises it may be better to first seek advise and stop digging a deeper pit of debt. With assistance it may be better to declare bankruptcy get some relief to restructure or get out before you loose everything.
Wall Street Finds New Subprime With 125% Business Loans - Bloomberg
New Subprime Market: Small Business Loans - Businessweek
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