We recently witnessed two examples of how the credit crunch is impacting small businesses - even those who are doing very well. First, we received a notification from Advanta about our corporate credit cards. Two days ago (May 26), we were told that our business cards would no longer be usable - effective May 30. Yes, you heard that correctly - 4 days notice. Now, getting a new credit card is not a big deal for us, but given that we have several monthly charges automatically billed to that card, it created what we like to call a high-urgency, low priority problem. With all the things on our plate, did we really need to go find a new credit card right now? Imagine the multitudes of small business owners who must also spent precious time to go make such a switch.
The second example just happened, as we went to get keys made for our new office (more on that in a bit). In sharing the credit card story, I learned that the locksmith, who had been using the same line of credit for 15 years without a single late payment, was recently told that the line was canceled and that the bank was no longer offering small business lines of credit. It's one thing to have to go source a new credit card. Imagine no longer having access to a $50,000 line of credit. What if you just happened to be relying on that for a large purchase of goods to sell?
It's common wisdom that cash flow management is a huge driver of small business success. But the current conditions are placing an all-time premium on that skill.
Anyone else care to share what they're seeing firsthand?
Outright is secure.