My income hasnt really gone down too much -- I gave myself and my partner a 15% decrease just to help keep more money in the business. I am spending less at home and saving more so if something does happen, we are prepared. I think many in the US are doing the same -- saving money to prepare for the worst. and this also directly affects the economy. Businesses that rely on impulse purchases and niceties cant survive when people are in thrift mode.
What really affected me was the freakin BANKS! I have always paid my comapnay (and personal) bills early or on time, never late. ever. I have a Line of Credit with the bank as most companies do, primarily so if my customers are slow paying I can make sure my employees get paid on time. I dont want to pay them even a minute late because without them, we can't stay in business.
So I go to the bank with my good credit and having been a great customer, and ask for a raise in my line of credit. I filled out the paperwork, and sure enough in 4 days, I got a very nice letter from the Bank:
"There are indications that the financial stability of your company has changed and therefore, under the conditions of our contract, known as a default, we hereby have frozen your current line of credit. You should continue to pay at least the minimum payment on your line until a review of your situation has been consducted and we decide whether to close the account or reinstate it. To aid us, please fill out this mountain of paperwork and submit your last 3 corporate tax returns. We will be in touch."
I got my credit report on my company -- it was SPOTLESS. I haven't ever been late. These ba$t@rds were doing this across the board to any company they could to reduce their own risk. I flew into a rage and went downt to the bank, took my credit report, and basically told them to reinstate it or I was moving my business, which is actually a great account: 5 employee credit cards, 3 checking, 2 saving and a line of credit that is always paid on time. They told me their
business manager would get back to me to discuss my concerns. I am still waiting for him to call.
The problem is, many small companies can't survive without a line of credit becasue their customers are paying slow, and if they can't pay their employees and vendors on time, then their credit slips, and their employees get nervous. Once your credit slips and you get behind, then you begin losing jobs because you can't purchase the things you need to do the jobs. Then employees, who sense things are bad, begin looking for other jobs. Their mood is bad and productivity suffers. Its a vicious cycle and, if prolonged, it just gets worse until the company tanks.
I can see how honest, hard working business owners are starting to go under because of how the banks and credit card companies are screwing them to keep themselves afloat. They are so fat and bloated from years of screwing us that this recession is really killing them, so they are now tapping thier customers for all they are worth.
SO I am now looking at other banks, and also deciding if I want to sell some of my assets in the business to raise some capitol so I dont have to rely on a line of credit. Screw them, I will learn to live without them.
(The two jobs are not related, btw. She'd be an area coordinator next year regardless of whether she stayed on campus this summer.)
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