Editor's Memo

In these times, even fastidious entrepreneurs must be careful

We've all read horror stories about how the troubles on Wall Street are being felt by small businesses. They feature the leaders of sound, growing outfits who suddenly find their credit lines yanked because banks are refusing to lend. Or they tell of healthy operations, eager to hire people or invest, unable to get financing to do so.

But the SmallBiz staff was doing what reporters do: working the phones. What we found, thankfully, was quite a bit better than the worst-case scenario, although it was still pretty bad. What surprised us the most, though, were not the people whose businesses were slumping or who hit a brick wall trying to get expansion capital. It was the entrepreneurs who said they were in hot water with their bank for violations that might have gone unnoticed a year ago. These are the business owners who had unknowingly tripped their bank loan covenants or neglected to send certain paperwork to the bank, only to find that the bank had rescinded the company's credit line or sold off their loans. With the economy struggling and business slowing, I can only think this sort of situation will become more common. After all, how many entrepreneurs claim that paperwork is their strong suit?

So as many times as you've heard this advice, please let me offer it once again: Read your loan agreement. Know what's in there. Cross your t's, dot your i's, and keep your business growing.

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