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tsuki Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-08-08 08:45 PM
Original message
I am a small business owner, that is small with a little "s." Most
of my friends and colleagues are small business owners. I am the lone Dem in the group, although there are many more independents than there once were.

This week-end, we got together.

Background. I have been in business for 25 years and have a reputation now as "cash flow." I have no difficulty setting up an account as I pay by the invoice, not by the statement.

My colleagues, younger than I and scrambling, have personally guaranteed lines of credit that enable them to open new accounts. Without the LOC, their suppliers have the option to close their accounts.

The BOA action against Republic Doors and Windows sent a cold shiver up their spine. It said to them that they can be bankrupted on a whim by their bank.

They looked at the owner of RD&W and said, "ya know, that could be me." This guy bought a mismanaged company in 2005 and tried to do everything right, and he was bankrupted by Corporate America.

They are standing by the owner who has offered to open his books to the union at the meeting. And they are very angry at BOA who is sitting pretty with 25 billion of their tax dollars. You try to do what is right and get f*cked by the big guys.

We decided to stop taking BOA cards for payment of services. They charge too much and times are tough.

It was interesting listening to them. Talk about conspiracy and tin foil hats...most believe that BOA took the action against RD&W because they were located in PE Obama's home town, and these are the guys that voted for McCain/Palin. Another was the fact that the media did not report the incident until it went viral on the internet. They were even using the my term "corporate media."

I am afraid that I could not resist a "told ya so" moment. I reminded them that it all boils down to how it affect you, not how it affects our country.

Sad, but true.









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geckosfeet Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-08-08 08:53 PM
Response to Original message
1. I closed my BOA accounts a few months back. Glad I did!. eom
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ayeshahaqqiqa Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-08-08 08:54 PM
Response to Original message
2. when workers and small business owners both
go against BOA, something's gonna happen to BOA.
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tsuki Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-08-08 08:56 PM
Response to Reply #2
4. That is what I got out of the conversation. I think that they finally realized
that they are closer to their workers than they are to Corporate America.

It was a "light bulb" moment.
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tigereye Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-08-08 08:54 PM
Response to Original message
3. I don't think most folks understand how precarious many businesses are
Edited on Mon Dec-08-08 09:01 PM by tigereye
without those lines of credit to keep the businesses going day to day.


It's outrageous for these banks, who at bottom created this crisis, to sit on the money that legitimate businesses, as well as home-owners whom the banks CHOSE to lend to with little over-sight, need to operate and survive, putting them at risk of losing homes, businesses and thousands of jobs.

It's outrageous and criminal! :grr:


on edit, I just sent a letter to my Senator to this effect.
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CoffeeCat Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-08-08 09:49 PM
Response to Original message
5. If I may ask...
...how are you and your business-owner friends and colleagues doing?

These must be very trying times. Have most of these guys kept their businesses going?

My husband works for an internet-service-provider. They furnish broadband internet service
to businesses of all sizes. He told me today that people are canceling their service left
and right. Many new accounts that they've recently landed, are communicating that they need
to hold off until Jan '10, due to corporate spending freezes.

My husband has always remained positive about the economy. However, tonight, for the first time
ever, he looked scared.

I asked him tonight what types of businesses are canceling, and he said, "Every business that you
can imagine...greeting card stores, car dealerships, restaurants, clothing stores, hardware stores.
Lots of mom and pop stuff...like Fred's fish market type stuff."

Small business is the backbone of America, and I hope you and your circle of friends are doing ok.

I'm glad that you have each other! Support is so important these days, and it's such good news
to hear that you guys have your own network--for emotional support and advice.

Keep us informed about how all of you are doing. :)
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tsuki Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-08-08 10:27 PM
Response to Reply #5
7. I retired Dec. 1. No need to go through the 80s again. I shall
follow my contracts to the end, but I am of that age.

My colleagues are scared. They have spent years building an employee base and now fear that they will have to let them go. That almost always wrecks a company. One told me in confidence that if things do not pick up, he will have to close in Feb.

Yes, it is scary.
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sandnsea Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-08-08 10:30 PM
Response to Reply #5
9. Yep, here too
I've got solid clients splitting their payments up, people who have never had to do it in the past. They said it's like somebody just turned the spigot off. Nobody is buying anything.
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tsuki Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Dec-09-08 07:58 AM
Response to Reply #9
16. Yes and it is heart breaking. I have built up a client base that I
care about, these are good people. I feel like we are all swirling a drain about to disappear any moment.

I have spent the last 7 years paying everything off and tucking as much money away as I can. We now produce 60% of what we eat. And I am the energy nazi around the house. We shall survive, but I do understand the crime wave in Japan of the elderly. I worked almost 50 years for this??

http://www.telegraph.co.uk/news/worldnews/asia/japan/32...
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riderinthestorm Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-08-08 10:03 PM
Response to Original message
6. Hmm, look deeper. The story is more complex than the mass media is portraying.
The Republic CEO was in negotiations with BOA to secretly move the plant to Iowa - a "right to work" state vs. Il (not a ROW state). He was planning to do this without the legal notification to the employees or legal payout of severance.

The line of credit was for that move.

When THAT line of credit was denied, for the move, the Republic CEO decided to just close the plant asap, blaming BOA.

The Republic CEO is as much to blame as BOA frankly. While I applaud his decision to keep the company in the US, his business actions were pretty despicable. There's a reason NOONE has had HIM on national teevee. He's as much culpable as BOA frankly.

Your business acquaintances have nothing to fear about their operations from what's happening in Chicago (unless they also are planning nefarious activities...).
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tsuki Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-08-08 10:29 PM
Response to Reply #6
8. Link?
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riderinthestorm Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Dec-09-08 07:53 AM
Response to Reply #8
15. Here's one
http://www.pephost.org/site/DocServer/Republic_workers_... that I got from Indiana Green on another posting.

There are others out there.

I first heard some of the story on a news station/talk radio show in Chicago yesterday afternoon(WGN, Roe Conn).

Don't get me wrong, BOA definitely bears a hefty share of the blame. They aren't loaning out the money that they were/are obligated to do. This owner wanted to move to IA, he applied for a loan. The company was healthy and there shouldn't have been any reason for BOA to refuse the loan. I don't like that the owner was going to screw over his long term chicago employees by moving to a RTW state, and getting out of union negotiations - that's shitty - but at least he was going to keep the jobs in the US. When that deal fell through, the owner conveniently scapegoated BOA for the closure when in reality the company was healthy, the owner just wanted to move. The owner however is the one who is legally obligated to pay those employees as his precipitous closure really isn't BOA's fault. That he is missing from this story is weird.

It's interesting that the MSM isn't giving the whole story - they've seized upon the big, bad ass bank being shitty. And they are, no doubt - there was no reason they shouldn't have given that guy a loan to make the move. But they are conveniently leaving out the owner's shittiness in this story as well.
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FarCenter Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-08-08 10:30 PM
Response to Original message
10. I thought that business owners were supposed to have capital
So that they owned their businesses and could buy supplies, pay salaries, etc.

Business owners who have to go to the bank for operating expenses aren't really business owners -- they are just like the homeowners with the no money down mortgages, who aren't really homeowners.

And they are not working for themselves -- they are working for the bank.
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Citizen Number 9 Donating Member (878 posts) Send PM | Profile | Ignore Mon Dec-08-08 10:48 PM
Response to Reply #10
12. Technically speaking....
It's an even better situation. Somewhat akin to what people wanted to do with their houses during the boom.

You know, buy a house with $1,000 down, wait a couple years, sell it for a profit of $40,000 and make a 40X Return on Investment.

Same house, same situation with a $20,000 down payment and you only made a 2X ROI.

Why risk your own money if the bank will let you risk theirs?

This is sorta simplified. :)
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FarCenter Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-08-08 10:56 PM
Response to Reply #12
13. Oh yes, leverage is wonderful when it breaks your way
But you are broke if the market moves against you.
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tsuki Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Dec-09-08 08:01 AM
Response to Reply #13
17. Absolutely. That is why the traditional short term loan from a community bank is better,
in my opinion.
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tsuki Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Dec-09-08 07:50 AM
Response to Reply #10
14. LOCs are not loans in the traditional loan; it is short term.
If small business got a fixed paycheck every week, they could budget. If all jobs were the same size, they could budget. Small business operate on smaller and smaller net profit margins, which affects their cash on hand.

In the olden days (which I remember well,) if a job came along outside the scope of my business, I could go to my community bank to arrange a short term loan to cover the extra materials needed to take on this job. With a community bank, heavily invested in the growth and jobs of my community, if my paperwork and research was complete and the job looked good, I could arrange a loan in a week against the first or second payment of the client.

With loan in hand, and operating capital in the bank, I could go to my suppliers and show them that although the amount of supplies are in excess of my norm, I have the money to pay you.

Today, community banks are gone. The mega-banks have no interest in the communities they serve. LOCs have replaced short-term loans. The length of a short term loan is usually one year. Every year, you return to the bank to pay them a large fee to renew the loan. All the rules are on the bank's side, including the right to cancel the loan.

Increasingly, supplies ask for your LOC on credit applications. There is no oversight on the use of an LOC, and with falling profit margins and increasing costs, like insurance and engergy, some small business use the LOC for daily operating costs. They usually end up losing their LOC, out of business and owing the bank (all the LOCs for small businesses that I know of call for a personal guarante by the owner/corporate officers.)




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Citizen Number 9 Donating Member (878 posts) Send PM | Profile | Ignore Mon Dec-08-08 10:42 PM
Response to Original message
11. When you say "BOA cards"
Do you mean BOA debit cards or BOA MC and VISA cards?
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