Credit

I have heard this over and over from small business owners: The banks are pulling out of the small business market.

Lines of credit are being rescinded left and right. I am aware of several cases where the bank called the small business owner and said, “We are pulling your line of credit.”

It did not matter whether the business owner was using the line of credit or whether the payments were timely. In each case I am aware of, the businesses were current on payments. The banks pulled the lines of credit because they were afraid the customer might use it.

As the banks continue to hoard the TARP funds to keep their balance sheets strong, the next wave of financial pain is hitting the small business owner.

The Wall Street Journal recently published an article that merely scratches the surface of what is happening. It’s much uglier in the trenches than many people realize.

If you’re a business owner and you experienced this, what did you do to solve your need for additional credit? Share your thoughts and ideas here.

Tagged as: Banks, Credit, Economy, In the News, Small Business

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