Tight Credit Becomes Problem for Small-Business Owners

As lawmakers debate the proposed financial bailout bill, small-business owners — who are especially vulnerable to financial meltdowns — face even tighter credit than usual. They're tapping credit cards and personal savings as it gets harder to land bank financing. They appear to be hoarding their cash, anticipating worse economic times. And unless the rescue bill frees up credit, they'll likely find it harder to get federally guaranteed loans. Small businesses employ 116 million workers and crank out half of the U.S. gross domestic product, says the Commerce Department. So if their credit woes worsen, the effects will be widespread. Year to date, Small Business Association loans to small businesses have plummeted compared with the same period last year.