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Credit freeze and your paycheck
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| Contributor | RP |
| Last Edited | RP Sep 29, 2008 12:49pm |
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| Category | Editorial |
| News Date | Sunday, September 28, 2008 06:00:00 PM UTC0:0 |
| Description | In the wake of last week's demise of Lehman Brothers and last-minute government bailout of American International Group, the credit markets have all but frozen. What this means for businesses is that they are having a tougher time just getting funding even for their day-to-day operations, never mind securing loans for expansion projects.
Also, since banks are now holding onto their money even more, they are either not extending lines of credit to companies or are instituting more onerous terms. Businesses of all sizes depend on this funding to buy supplies and inventory, make payroll and extend credit to customers while waiting for payments to come in.
Most businesses don't keep much cash on hand. They rely on banks' lines of credit to cover them until they get paid by their customers. |
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