"Small businesses getting loans to make payroll"..What am I missing here?

[SoCalDem]

More than a couple of pols have uttered these words.. My question is this..

If you are a small business owner, and you have to get loans to cover payroll, shouldn't you seriously reconsider your business plan?..and maybe you ought to consider selling out..

My aunt owned a very profitable small business for over 40 years, and she NEVER... EVER.... EVER took out a loan...

[glowing]

1. Say, for instance, that you own a hotel.. Like my employer does...

There are certain months that you make money hands over fist, there are other times you don't.. Sometimes you need an infusion to take you through the bad months until you get to the good months. Its not the best way to run a business, but its better than me losing a job. AND if the nation was financially able to take vacations and pay to stay at hotels, then she wouldn't have to take loans to stretch the bills out during those "bad" months.

[TomInTib]

2. It's the damned economy.

For the first time in eight years, we are not drawing any money out of our Gallery.

Independent retailers are taking some pretty hard hits out there.

And we don't have any real competition.

www.OpiaHome.com

http://www.vizzvox.com/stories/9CBIe662CtQsI01fms

[galileoreloaded]

3. You need to understand working capital and float. Margins sometimes aren't..

recognized for months or years. You can't open a flower shop without a credit line of at least 50K.

[SoCalDem]

5. It must be nearly impossible to run a business these days..

My Aunt ran hers with a positive cash flow, money in the bank, and always paid on time to every supplier..They made enough from that business to live well, drive new cadillacs and took 'round the world cruises every year :) She must have been a helluva businesswoman :)

[Bonhomme Richard]

8. I run my company that way now.

Started it 8 years ago. I don't spend like crazy, I pay everyone on time, I schedule the delivery of items needed to manufacture so that I get paid when my bills come due.
Most important....I take a very modest income (enough to pay the bills) and put the rest back into the business. My company has a line of credit at the bank that i haven't had to touch in years.
It can be done.

[kestrel91316]

4. I have credit cards that help me get through rough periods, like NOW, lol.

Businesses have always relied upon banks to help them with periods of decreased cash flow, at least in the past 100 years or so. We pay things off when we are flush, maybe get a little socked away in savings, and then when things slump, rather than wiping out personal savings, we do the short term loan again. Instead of always running to the bank and groveling each time, I use the business credit card which is a de facto line of credit.

The past 8 years have not been kind to small businesses whose clients are The Little People.

[rucky]

6. Cash flow is a whole different ballgame than profitability.

Businesses can be profitable and still have cashflow issues for several reasons: seasonality and growth - not just bad management. Business plans can predict cashflow glitches to a certain extent, and sometimes taking out a short-term loan is the solution. It can be part of the plan.

[Mika]

7. I just gave my employees a raise.

To offset the downturn.

I make the difference up by charging rich McCain supporters significantly more. }(



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[nevergiveup]

9. I sent $20,000.00 to a small

business last week so they could meet parole. They have been one our most important suppliers for the last 30 years. They are in huge trouble and I am not sure we can survive ourselves without them. WE are a small Ma and Pa operation and have only 4 employees. I borrowed the money to help them out. Times are really tough out here.

[SoCalDem]

10. They are indeed.. I gave my best friend $3K last week so she can leave her horrible husband

:)

[Better Believe It]

11. These Are Different And Harder Times