Wall Street woes hit Main Street business owners

By Lindsey Ward

Published: October 1, 2008

We’ve heard a lot about the plan before Congress to help the financial situation the country is in and while there’s a lot of talk about its impact on Wall Street, it’s also having one on Main Street.
   
It may not have affected you directly just yet, but with the credit crunch we’re in, it’s beginning to trickle down.
   
Basically credit is being frozen which means it’s hard to get a loan, whether it’s for a car, a house or even to go to school.
Since loans aren’t being given out, that means it’s going to be harder to sell your property.
   
The credit freeze is also affecting businesses that rely on loans for day to day operations.

Fantasy Creations Owner, Teresa Martin, admits the economy is looking a little spooky these days for small businesses.
   
Credit is her lifeline and it’s starting to dry up.

“I know that banks are really tightening up,” Matins said.  “Since I’m a new business I might be someone that they wouldn’t want to extend extra credit to, so it’s a little scary out there right now.”

We spoke to several local agencies that help small businesses apply for loans and they say one of the biggest problems they’re seeing now is the struggle business owners face financing inventory.

“I knew that I was expanding and that I would need more and that’s when I started calling the companies,” Martin said.
   
Those companies aren’t creditors, this year Martin’s relying less on a credit card, because she only has a $10,000 limit and more on a good faith credit line through her suppliers.  That way with their help she can buy the $15,000 worth of products she needs without fighting for a loan to pay for the difference.

Martins says had she not done that she would be in big trouble now.
   
“Halloween is my Christmas, so pretty much what I make through this month carries me through the year.”
   
She’ll pay the money to her vendors after Halloween, but finding that extra cushion that will grow with her business is looking more and more like a fantasy these days, forcing her to get creative.

“I had to go out and find other ways to be able to generate money,” said said.

One of the small business agencies that we spoke to says obviously its client’s sales are down, customers are slower paying them, and those vendors are persistently knocking.