By MAE ANDERSON and ANNE D’INNOCENZIO
In February and March, West reached out to three lenders he had previously gotten financing from, including one where he has an existing line of credit. To his surprise, he was rejected. “It’s hard to read how severe this is going to be, but it’s certainly going to be significant and when you look at how things play out, small businesses are hit the hardest,” said Ray Keating, chief economist for the Small Business & Entrepreneurship Council.
“It’s just not the right timing now as lenders appear unclear about the broader credit markets and seem to be clutching the purse strings tightly at this point,” Foreman said. “We just have to ride this out until conditions are right to arrange the proper financing for our acquisition.” A credit crunch affects small businesses more than larger ones, he said, because smaller businesses have fewer levers they can pull to get financing.
Barber said that her business — which generates annual revenue of 2.5 million pounds — is essentially self-funded but when she recently turned to PayPal for extra funding, the financial terms were stricter compared to a year ago. Barber wanted to borrow 150,000 pounds but learned that she would get charged 10,000 pounds upfront, instead of the usual 6,000 pounds and that she needed to pay within six months, instead of nine months.
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Small business owners feel the credit crunchSmall businesses are seeing the already-tough process of getting business loans get even tougher. Borrowing for small businesses was already constrained due to rising interest rates. Following the recent Silicon Valley Bank collapse, some banks – particularly the small and midsize banks that serve small businesses -- may be forced to tighten credit further, since they’re seeing an outflow of deposits. And banks are being more cautious in general due to uncertainty about the economy. Small businesses say they're getting rejected for loans or seeing more unfavorable terms, meaning some plans for expansion are being put on hold. Go to your local community bank or credit union, folks. It’s like 2009 to get out there, everybody’s going to feel the credit crunch. Just wait until credit card companies start reducing available balances out of the blue. Or maybe they won’t this time, I think that’s what kicked off a bunch of personal bankruptcies back then. And yet America is standing on $trillion small business.
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$10K grant program offers unique program for Houston’s small business ownersSmall businesses, in Houston, that survived the pandemic and are still trying to grow, can apply for a grant of $10,000 worth of digital assistance. You mean the fake Covid BS you spread fake news! FAKE
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