David Kirkpatrick

May 8, 2009

Small business credit crunch

Filed under: Business — Tags: , , , — David Kirkpatrick @ 3:55 pm

Tight, or no, credit for small business continues. Here’s some tough advice from Doug Tatum, co-founder and chairman emeritus of Tatum, an Atlanta-based consulting and executive search firm that specializes in helping growing companies with finance issues. Tatum is the author of ”No Man’s Land: What to Do When Your Company Is Too Big to Be Small and Too Small to Be Big” (Portfolio, 2007).

From the link:

Q.What’s your advice for businesses looking to borrow money these days?

 

A. Quit trying. The credit markets are tougher than I’ve ever seen them, aside from the Carter years.

Q.But it takes money to make money, right?

A. Entrepreneurs have a limited amount of bandwidth, and they have to quit wasting their time chasing the impossible. They need to think about how they can change their business model to become profitable. That’s where the capital to grow will come from. I just spent some time with a health care consulting company that pulls in $6 million in [annual] revenue with plans to grow to $10 million. They are just bobbing, weaving and growing despite how hard it is out there.

Q.Why hasn’t the government been able to open up the credit markets?

A. Banks have become cautious about what they have on their balance sheets. They still don’t know what their portfolios are worth. That means they’re waiting for the next shoe to drop, which could be the commercial markets. I talked to the C.E.O. of a community bank who told me that they have the regulators telling them when and where they can lend money. So while you might have politicians saying, ‘Lend, lend, lend,’ the regulators are holding the banks back.

Leave a Comment »

No comments yet.

RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: