Credit crunch for small businesses

October 1, 2008 3:35:29 PM PDT
As lawmakers try to figure out how to fix the economy, small business owners are trying to figure out how to stay afloat.With credit markets frozen, mom-and-pop shops like "Just Desserts by Jekeitta" are being hit hard.

"We just keep pushing each other and, with everything we know, this too shall pass," said owner Jekeitta Powell. "We're just trying to survive this moment."

It's a moment when banks aren't backing many new small businesses, or extending credit to existing ones.

In April, Powell opened a second bakery in Wilmington. At the time, expansion seemed like a sweet idea. Then, the economy soured.

When the housing market started to tank, the director of Delaware's Small Business Administration knew trouble was on the horizon for small business owners.

That's because many entreprenuers put up their own homes as collateral.

"If there's no equity in the homes, the banks aren't seeing many bankable deals and that's really what we're dealing with," said Jayne Anderson of the SBA.

At "The Day Spa by Tonya," fewer customers are getting pampered because they have fewer disposable dollars. But owner Tonya Tuggle is optimistic things will pick up, a spirit shared among most small business owners.

"I am just hoping and believing I will weather this," Tuggle said, "As we all are hoping and believing that we will."

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