Orange County Register

Small-business owners are cautiously eyeing their cash flow as Wall Street melts down and banks tighten credit, even after Congress approved a $700 billion bailout - or maybe because of it.

Business owners are used to the ups and downs of business. But now every slow paying client, every bank rebuff is magnified in this climate. That’s what some Orange County business owners are telling me.

Here’s a sample:

Amit Okhandiar, head of mLogica in Anaheim: A business credit line has become unnecessarily difficult

Amit Okhandiar, mLogica

to get even from the bank where we do extensive transactions.

Douglas Schmidt owner of Hard Soft Corp., a Brea computer consultant, says suppliers are doing the same thing: Our credit lines for all of our primary vendors have been cancelled, so now we have to fund acounts receivable out of company funds.”

Pat Dwight, general manager at Steams Dwight & Associates, a Laguna Hills marketing firm, is tightening the belt as a precaution. “No employee insurance plan in 2008; reduce work week for employees by two days; tap into the line of credit more than last year.”

So is Bob Richardson of RWR Marketing and Graphic Design in Huntington Beach: “Much due to media hype, I have cut back spending, think

Bob Richardson, RWR Marketing

twice before buying new equipment or personal luxury items. Taking a wait and see attitude. Again, because of the hype and the fear our government officials are putting on us, I think most of Main Street will pull in the reins – even if business is good — which of course will cause the exact thing the government wants to prevent.

“My credit is fine. I pay off my credit card balance every month (our state and federal government should try that). Maybe I’m not rich enough to feel the pain yet.”

Jack Bicer, CEO at Septium Corp., an Irvine custom software developer, says client problems could become his firm’s problems: “Some clients are experiencing cash flow problems, and some came close to closing their doors. They are maxing out on their home equity loans to keep doors open or ending projects prematurely to save cash.

“Their cash flow problems have now became our cash flow problems. It is now taking almost three times as long to collect on invoices and uncollected amounts are rising.

“Although we notice a fair amount of gloominess and uncertainty in the marketplace, clients are still continuing investing in new projects, albeit at a slower pace and with budgets lean enough to be in weight loss commercials.”

What about you? Is your banker being difficult? How about your suppliers? Are you cutting back and waiting to see what happens next on Wall Street and Main Street?

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