Small Business Financing During A Recession
Its interesting in that much of what you read talks about how difficult it is to secure business financing during a recession, and yet when you talk to small business owners and read various surveys, the more pressing issues that comes up more often than business finance related issues, is the fact that sales are down.
Yes, securing capital is more difficult right now, but most small business owners would rather have a way to access customers versus securing capital. In some areas of the economy, consumer spending has dropped by as much as 20%, leaving small businesses focusing more on cash flow management and cost control of what they already have versus looking for any sources of financing that are more associated with growth or expansion.
If a business gets into trouble through a lack of sales, there are no financing programs that will solve that problem whether in times of recession or not.
Close management of cash flow and cost control are much more important business finance activities in 2009 and likely in 2010 than banks who are too tight lending out new money.
Once consumers start spending again, then business financing will be more of a need and sources of financing will become more of a concern
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