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Are small businesses doomed?

Here’s a given: Congress will figure out some sort of a bailout plan for our financial institutions and Wall Street. But here’s another given: Small businesses keep our economy afloat – in tight economic times and when the good times roll. They create more jobs, are more sustainable and are far more flexible than the behemoths in need of a bailout.

Pundits are posing dire days ahead. And we can’t ignore the effects we’ll see in our small and start-up businesses. If you thought credit was a tough issue before, you ain’t seen nothin’ yet. But now is not the time to lose hope. Sure, there may be more bootstrapping in your immediate future, but that also means less debt down the road.

Rhonda Abrahms, author of The Owner’s Manual for Small Business, offers some insights on her blog about how the government might reach out to support small businesses. How about tax credits when you hire your first employee? Or what if the government shored up SBA7 loans? See if you think her ideas make sense.

As usual, also has insights on how the crisis might affect financing – and how you can approach lenders during a time of crisis. Trade credit, convertible debt, new approaches to bootstrapping – the experts explore these and other innovative financing ideas.

This week’s turns of events have brought the credit issue into sharp relief, but banks started pulling back on small business loans – especially those secured by home equity – about a year ago, according to Business Week. But not all banks, and not in all types of industries. There are still banks offering small business loans, and your SBDC can help you find them. Just know going in that this is a tough borrowing climate and if your credit score isn’t remarkably high (think 700s), then you need to creatively approach the issue of financing and timing.

Don’t give up. Get creative.

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