My column this week in the Financial Post investigates the credit crunch: How has the financial meltdown affected small business access to capital in Canada?
My mini-survey found that even the experts are confused about how serious the problem is. But at the same time, it’s clear that there are specific actions that entrepreneurs should be taking to protect their access to credit, and position themselves to prosper when things turn up again.
Here’s an excerpt:
"The CFIB's Ted Mallett says the banks are trying hard not to repeat the mistakes of the 1990 recession, when they pulled credit from strong and weak companies alike. "Way too much homogenization of debt went on," he says. "The banks cut back everyone. And it made the recession worse, because many successful businesses were cut off from their lifeline."
This time around, the banks say they understand the small business sector much better, and are being more sensitive in working out problem accounts.
"It's too early to tell if the banks are doing a good job," Mr. Mallett says. But he warns the banks they are being watched. "Any signs that they're returning to their 1990 behaviour will meet with pretty strong resistance from us."
Read the whole story here.
http://www.financialpost.com/small_business/story.html?id=944825
2 comments:
With the economy in the state it is currently, it would be wise for women entrepreneurs to keep careful records and watch their credit.
Great article, in FP, Rick. I especially liked the point about how banks are understanding that it is important to view the strong differently from the weak with respect to credit availability. We're all interested in watching carefully what happens in the next few months...
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