It is interesting to note how the business sales market has paralleled that of the banking industry in recent years, with sales declining at similar rates as that of bank closings. The Federal Deposit Insurance Corp closed 157 banks last year, up from 140 in 2009, while the number of completed business sales continued to fall through 2010.
While a causal relationship may not be evident, the fact remains that, as a consequence of these trends, small businesses have suffered the most. For small firms and entrepreneurs that are struggling to achieve their financing needs – be it to sell a business or buy a franchise – they may want to consider a few financing strategies to help keep them afloat.
"You may be able to cut your costs enough to keep going by closing locations, or even the entire business temporarily," writes Mark Hendricks for the website AllBusiness. "If labor costs are a major portion of your expenses, you may be able to use contract, temporary or outsourced employees to replace higher-cost, full-time, permanent workers."
With banks' tightened lending policies – not to mention a systemic dearth of community banks to begin with – small firms should consider alternative financing such as factor or angel investment. For smaller needs crowdfunding resources and microlending institutions are also available.
It’s interesting that there were no jail sentences for any of the banks and financial funds that ruined the economy and hurt small businesses. As far as I know, no one served jail time or was even hauled into court in the biggest financial fraud ever foisted on the American public.
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