Money-Borrowing: Still Not for Small Businesses

Even though several billion dollars worth of stimulus and bailout money had been poured in, the credit squeeze which had started the economic crisis is still not showing significant signs of recovery. In general, banks are still not in the process of lending and a lot of small businesses are still very much struggling to look for ways and money that would be used to finance all of their operations. In order to have a better idea of how these business owners cope with such a predicament, Doug Tatum, who is the co-founder as well as chairman emeritus of the consulting company Tatum, shares much of what he thinks about the situation. In the past couple of years, Tatum had authored a book entitled “No Man’s Land: What to Do When Your Company Is Too Big to Be Small and Too Small to Be Big” had had spent a lot of time pitching tax-deferral plans at Capitol Hill.

Sound Advice

Doug Tatum has some good advice for small businesses that need to borrow money for their operations. He says that it is important to stop trying because the credit markets are quite tough at the moment. While it takes money in order to make money, entrepreneurs also have a very limited size of bandwidth. They ought to stop wasting time by chasing after what is impossible. It is important for them to determine just how they can make some changes to their business model in order for it to be very profitable. This is where their capital growth shall come from. Tatum shares that he spend some time interacting with some health care consulting companies which pulled in around six million dollars’ worth of annual revenue and that the company had plans to extend this to ten million. This company is just bobbing along and weaving their way inside and out, growing despite the fact that it can be quite tough out there.

Government and Credit Markets

Tatum also has some explanation as to why the government has not been able to encourage the opening up of the credit markets. He says that banks are now more cautious that even when it comes to the figures on their balance sheets. At the moment, they are unsure regarding the worth of their portfolios. This simple means that they are waiting for the other shoe to drop – and this might also mean the commercial markets. Speaking to the chief executive operations of one community bank, the latter revealed that a lot of regulators tell them where exactly they could lend the money. And so while the politicians are busy telling a lot of people to lend, these regulators still decide to hold the banks back.