Thursday, February 5, 2009

Would You Turn Down Bailout Money?

Many entrepreneurs would love to be contacted by the federal government and hear the following words: "We have bailout money for you." This could potentially rescue them from the very real and threatening effects of a down economy.

Some, however, are getting that call - and are turning it down. Why?

Well, accepting bailout money from the federal government is almost like accepting grant money: There are certain conditions you have to follow. You don't just get the money, and do as you please. The government regulates your activity.

According to Business Week, about 50 small banks are saying "no thanks" to bailout money because the government wants to "dictate how they structure dividends, compensate managers, or make acquisitions." They even want to tell them who and who not to lend money too.

I can just imagine the government giving bailout money to a soul food restaurant, and regulating by telling them they need to cut back on the chicken and waffles.

Or even giving money to a bakery and telling them to ease up on the icing for cakes.

That's crazy. I'm not sure I'm interested in getting bailout money anymore, but at the same time - I don't think I'll ever get that call anyways.


  1. So it's kinda like getting money from your parents... They direct where it goes or who you save... Hmmm Bailout Smailout!

  2. Or it's like getting money from your mother-in-law...That's alright. I'll just do without!