Kelly Spors Answers Small Business Questions
Originally published in The Wall Street Journal

Q: I have a small gift shop, and my credit-card company recently announced it would stop taking new charges. This is baffling and scary, and getting quick enough approval on a new card will be hard to do. Without a credit card, many vendors will not ship product. Any suggestions on what I can do?

A:Getting approved for a credit card—or any business loan or line of credit—is much harder now than just a year ago. But many businesses with at least decent credit are still making it work.

A good strategy is to approach community banks or credit unions rather than major national banks, says Ruth Sheets, a consultant to small and midsize businesses, who is based in Newburyport, Mass. These smaller, local lending institutions suffered less from the financial mess on Wall Street and are using the credit crunch to strengthen their ties with local business owners.

Smaller banks have “a lot more leeway” than large banks right now, Ms. Sheets says. “I think your real goal as the business owner is to develop a relationship with your bank, because then they’re going to be much more willing to help you.”

Smaller banks and credit unions often carry their own branded credit cards and charge lower fees than large banks. If you can’t qualify for a regular card, you may at least be able to get a secured card, which requires cash up front as collateral.

Ms. Sheets also suggests considering a business line of credit or a Small Business Administration-backed loan, if you don’t have one already. Sometimes lines of credit can be backed by accounts receivable if the business doesn’t qualify for an unsecured line. And SBA lending seems to be thawing after a deep freeze, thanks to stimulus funds from the Obama administration.

Ruth Sheets of Ducks in a Row Consulting provides strategic business consulting to start ups, fix ups, and build ups to turn business pains into business gains. Ducks in a Row Consulting helps businesses to increase their revenue and profitability and fix operational problems that have become obstacles to success. With an operational and marketing focus, we work with companies in various stages of transition to launch new products and services, target new markets, eliminate barriers to business viability, and establish and achieve business goals. To obtain more information about Ruth Sheets and Ducks in a Row Consulting please contact us or call 978-463-2264.