Credit crunch hits small business
May 11, 2009 | alternatives, industry, personal finance | Comments (0)It’s ridiculous that we’re even having a debate on restricting credit. From BusinessWeek:
For small business owners, a line of credit can be a lifesaver, giving them a buffer against cash-flow problems and enabling them to handle regular expenses such as payroll. But beginning in March, according to documents obtained by BusinessWeek, JPMorgan Chase suspended credit lines for a large number of business owners. According to someone familiar with the matter, the move affected thousands of businesses. They had been clients of Washington Mutual before Chase bought the ailing bank in September 2008. The documents show that Chase tasked a special group inside the bank with responding to inquiries from borrowers.
Obviously, these small business owners need more cash the is provided by the typical payday loan. However, for some Mom & Pop stores, for the skilled craftsmen, we’re guessing that payday loans are helping pay the vendors or buy the paint and tools, and pay the day laborers they use.
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