Refusing to Participate in the Recession, Part 1

“We understand that there is recession. We are just refusing to participate – and so should you.”

The words “recession” and “bad economy” have become a warm blanket for too many small to mid-sized business owners. It is easier to comfortably remain beneath the covers of these words than it is to rise out of bed and face what has always been a cold, stark reality of business: it is extremely difficult.

We business owners have understandably been beaten into submission by the constant media barrage informing us that the economic sky is falling. As a result, too many of us are accepting slower sales, decreased volume, or lower incomes as inevitable consequences. But are these conditions truly unavoidable?

The economy of this great country is, as others have described it, much like a rubber band. It has been stretched too far – not unlike it has in the past. But what is the more likely scenario? Will the economy break in half, never to return to normalcy? Or will the natural and inherent tension that has kept it in check for the majority of this country’s history force it to snap back so that it resembles its former, more natural self?

Before you answer that question, consider the primary reason cited in the media for this bad economy. It is, by all accounts, a failure on the part of large banks with regards to overly aggressive lending practices on real estate mortgage loans, many of which have gone into default.

This is, unfortunately, a reality. While one might be able to argue why it happened, no one can argue that it has happened. Similarly, one cannot dispute the fact that real estate values have fallen precipitously and that there is a general lack of liquidity in that sector. It is no great revelation to state that the large lending institutions and those dependent upon their funds are in peril.

Let us consider also the fact that our country’s economy – and, to a degree, our country itself – has been founded upon an entrepreneurial spirit. The present day carriers of this torch are the small and mid-sized business owners out there. These are the brave souls with the guts to hang a shingle, take out a loan, and work for little or nothing at the start in pursuit of the most American of dreams.

These people and their businesses – not the housing market and not Wall Street – are the backbone of this country’s economy. It is the small and mid-sized business person who, in pursuit of his or her goals, spends the money – on wages, services, equipment and countless other items – that stimulates the economy. It is this same business owner who empowers others like employees and vendors to do the same. Resultantly, the company’s vendors – cleaning services or small IT firms, for example – are able to do the same thing with their employees and suppliers. This is the essence of trickle-down economics. This is what makes our economy go.

The problem for many of the owners described above is that we are now of the mind that there is no liquidity in the commercial or business finance sector. This, quite simply, is untrue. In fact, business owners have just as much access to funds as they have in the past. The only change is that this money will not be coming from their local depository institution. As such, we not only have it within our power to refuse to participate in the recession, but to pull the country out of it far more quickly than any politician or government agency.

To find out how and why, look for part two of this piece, and visit us at http://www.bayharborcapitalcorp.com for all of your business financing needs.