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Another major financial crisis is brewing as the nation's 27.2 million small business firms struggle to get the credit they need to maintain operations.

Small business owners and managers know all to well that cash flow is the life-blood of a small business. Some small businesses stay afloat without the best products or services, and some stay afloat without the best people; but none stay afloat without money.

While focusing on the bailout and preservation of the banks and big corporations, Uncle Sam is not recognizing the "perfect storm" that is brewing in the community of independent, small business firms that built America; as evidenced by falling revenues, tightening credit, less capital spending, job cutting, falling confidence, and the ever-burdensome government red-tape and costly regulation that threatens to cripple the core of American enterprise.

In fact, the following was reported by CNNMoney.com by Emily Maltby (July 2, 2009):

"Despite emergency stimulus measures, small business lending continues to fall. In the just-ended quarter, the Small Business Administration's flagship program backed 30% fewer loans than it did a year ago, and 55% fewer loans than it did in 2007, before the recession set in.

The numbers bear out the grim reports from business owners who say that credit is dangerously scarce for small firms. The SBA's 7(a) program approved 11,580 loans in the quarter ended June 30, valued at $2.5 billion. That's down from 16,490 loans, worth $3.4 billion, in the same quarter last year.

For the full year to date, the situation is even darker. In the first nine months of its 2009 fiscal year, the SBA has approved roughly half as many loans as it did last year."

What in the world is Uncle Sam thinking?

- Ed Smith, Publisher
The EHS Letter Manual