It's a testament to a corrupt legal system and poor regulation, that's for sure. It's a predatory practice and no doubt brings revenue to Orange County NY and other places.
However this isn't really about financial education. For many people, if there's even a slim hope of a business succeeding, the fees and risks associated with an absurd loan are preferable to being forced to close the business. The anecdotes are almost always of the form "we just needed a small liferaft until business picks up. Once business is good, we can pay it off." That's human nature to an extent.
And there are plenty of war stories in “business success” books where $founder leveraged his credit cards and mortgages to the hilt, before the wave broke to
make him a billionaire.
They curiously tend to avoid mentioning that, 9 times out of 10, that sort of behaviour ends up in bankruptcy and tears.
However this isn't really about financial education. For many people, if there's even a slim hope of a business succeeding, the fees and risks associated with an absurd loan are preferable to being forced to close the business. The anecdotes are almost always of the form "we just needed a small liferaft until business picks up. Once business is good, we can pay it off." That's human nature to an extent.