Own a Business? Need Credit?

Debates, bailouts, federal deficits and all, and here’s a thought about small business: Some small businesses depend on readily available credit; and some don’t.

What kind of businesses are more likely to need credit?

Those who do already know it. I can think of a few:

  • Businesses who sell to distributors. Most of the companies who make the stuff you buy off of a store shelf, for example. They make the stuff and sell it to distributors. The distributors sell it to the stores. The stores wait for customers to buy before they can pay the distributors. The distributors wait to pay the manufacturers. While all this is happening, credit is critical.
  • Businesses whose customers need credit. These would be, for example, mortgage brokers, auto dealers, furniture stores, and … think about it.

The New York Times had a story last week, in the middle of the bailout controversy, called Credit Crunch Squeezes Small-Business Owners.

I suspect we’re going to see a lot of that in the days to come.


  • Financial Projections says:

    Credit terms to customers will have to change. Companies will not be able to allow customers to have those nice terms.

Leave a Reply

Your email address will not be published. Required fields are marked *