Credit Cards When in a Crunch?
In the latest newsletter from Forbes.com, one article points out that the debt situation is shifting from home equity to Those Credit Cards. Here are some excerpts from Brian Shniderman’s article that should interest small business owners:
Small-business owners who frequently leverage personal assets to secure credit may find it increasingly difficult to tap into those lines as lenders freeze, reduce or altogether revoke home equity and other personal lines of credit. Before tapping into savings and then into their investments, we can expect this group to increasingly use existing personal and small business credit cards to address short-term cash flow needs. …
Small businesses, truly a major engine in our economy, are at risk in a scenario that features stagflation and a prolonged recovery. Sadly, many could shrink or go under entirely if it plays out that money remains tight. In some cases, even the business owners’ personal assets may have been tapped out. That could certainly cost our country jobs and innovation.
Have you as a small business owner, used your credit card in tough economic times?
In the same newsletter, David Malpass, chief economist for Bear Stearns, paints a more positive picture on a macro level, in his article, Credit Crisis Hits Home.
Funded by millions of U.S. taxpayers, the government will mail checks to millions of households hoping they’ll spend their rebates to lift the economy. Growth is ultimately driven by hard work, innovation and profit. But the first estimate of GDP comes from how much is spent; by that gauge Washington’s gesture is unusually timely.
Will you spend your tax rebate check on personal consumption or will you save it for the future? Or invest it in your business?
