Small businesses are often said to be the backbone of the United States economy. Many small business owners have already begun their own preparations for the next financial downturn; maybe they know something we aren’t being told by the mainstream media.
According to a new survey by Bank of America Corp, small business owners across the United States are bracing for the next recession. This news comes on the heels of data suggesting Americans spent more money on consumerism in March and continued to rack up credit card debt to finance that spending.
“We continue to see a good, strong solid U.S. economy,” said Chief Executive Brian Moynihan on a conference call earlier this month. Although the bank also said it is important for businesses to be ready for a potential downturn, top executives pointed to growth in consumer spending and low unemployment to show the economy is still in good shape. But those numbers were skewed and all you have to do is scratch the surface to get a feel of what’s really going on in what is left of middle-class America.
A spike in spending is only a good thing for the economy if Americans saw the wage increases to support it. But considering consumer spending was up .9% while incomes only rose .1% and inflation was up .2%, the country used a lot of credit to boost their spending habits. And small businesses can see what’s coming down the proverbial pipe.
More than two-thirds of small business owners surveyed by the bank said they had taken steps to prepare for an economic downturn, including setting cash aside or planning to reduce expenses, according to a report by Reuters. Many have also decided to skip obtaining a line of credit, much to the disdain of banks everywhere. Only 19% of small business owners considered taking on debt as a step toward recession preparation, and that’s not sitting well with bankers.
Bank of America’s head of small business Sharon Miller said that there are just too few businesses taking out loans. “When you need a line of credit, you often can’t get one,” she said in an interview. “Business owners should be thinking about that now.”
Small businesses are not sharing in consumer’s optimism either. They showed less optimism about the U.S. economy than last year. According to the survey, forty-eight percent of business owners felt the national economy would improve over the next year, down from 55 percent last fall. Concerns about healthcare costs and the impact of trade wars contributed to the declining sentiment.
For all the oft-mentioned in the news ‘recovery’, as a small business owner this article to me is spot-on; other than, the idea of going into debt/taking on a loan at this present moment. For tooling/equipment, for goodness sakes, ‘yes’… if somebody like me can afford to, now is the time to self-invest for the uncertain future. Even commonly used parts/hardware inventory increases I opt for currently. Same is true with vehicles and/or other necessary larger purchases. Loans? Still a ‘no’. As for savings, …. well, if you for some reason trust your banking/financial center.. it’s up to you. Again, I opt for what I need, use first over all other outlays. As for employees, I hate to admit it; but, part-time – no liabilities as much as possible in terms of more than week-to-week hires. I’d suggest what works best is to create a network of guys who are also self-employed that can aid in the larger jobs as need be and are willing to mutually call in support from one another.
Small businesses have waited for this recovery and the smart ones will ride it hard to the end. The Reagan recovery tells us what will happen and that is Mr. T will win a second term, dRATS will double down on the politics of personal destruction, and growth/profit will finally wind down in the term after that.
Only losers are pulling in. It’s time to make up for what the Kenyan did to us.
Anon, by your answer, I can only guess that you too might own a small business. I’ve done so, my own 1120s corp. for now almost 30 years. Survived a lot of b.s. along the way. Still going to now. What cost-savings measures or concrete financial steps (i.e. loans, equipment investment, vehicle leasing say….) have you taken? I mentioned in my post above several – one of which was not hiring; rather negotiating with other businesses in the same venue (for me – those other marine-related service providers for instance), instead when additional labor was needed. I’d be glad to know some other plans that have worked. Politics are one thing, practical examples another. Share, huh?
Well Junior, I’ve been in this for 33 years this July and small owners such as myself used to say during the cursed Obama years, “last man standing”, if we could hang on we would come out on top. Last year my business doubled, and everything in the business is paid for. The profits over the next 5 or 6 years go in my own pocket. Then I suspect we will hear what we heard last time, “screw the help, I’m taking care of myself” as we enter the wind-down. The RATS will kill it in the end so make hay now. I do Sub, I also have people who like my stuff and will work for it. Small businesses can be pretty creative in networking because few can do everything themselves.
If there was ever a single reason to vote for Trump’s second term it is the economy, everybody was waiting to spend what they had saved to protect themselves, and the big investors are all in now. “The business of America is business” said Coolidge. Trump understands it. If he needs somebody to carry his water bottle I’ll be there.
This is real folks, and not fear porn.
From your survey link:
“The Charlotte-based bank is looking to grow it’s unit that caters to businesses with less than 100 employees and less than $5 million in revenue…”
So they are running out of big corporate debtors and are moving into an area generally serviced by local banking to find more suckers. BofA must be hurting. But the debt must grow or the banks go “Poof”.
They want my small business to pay a new tax for handicapped access.
It’s an online office, where no inventory is supposed to be held, and no customers are formally allowed to visit.
My acquaintances with physical premises have to cover these amendments at private expense.
Who is creating these supposed opportunities out of nothing?
When they need a line of credit, they are banking on the number of people in the formal economy, or they sell of special drawing rights to natural resources.
For instance, groundwater is shipped abroad, in large bags, while they guilt you for watering the lawn.
Credit is not money. Who cares? Use it and when the fall out happens you are not expected to pay. Hhahahahaha
I fail to see what the story is here. Unless you were born yesterday and never heard of recessions or business planning.
New stories at SHTF……….
“Farmers are worried about sunsets, might halt growth of their crops” better click my link for seed vault
“McDonalds issues new warning on their coffee “Caution: Contents Hot”
For the top 80%, sit back and enjoy the prosperity, the sky ain’t gonna be falling.
I acknowledge what is the business model, around here.
But, shtf is an everyday occurrence.
Rather than trying to know all the unknown unkowns, you could prepare for life as we know it.
“Are now preparing? Man are they behind the game. I haven’t ever stopped. Been in business for twenty-five years. Just got back from Tenn., went down to see Mom and Pap. Took a fresh baked chocolate cake, half of a cooked and fresh sliced country ham, four blocks of scrapple (they don’t know what Scrapple is in Tenn.) Plan to go back down in the fall and take them fresh crab meat, oysters, more scrapple and some fresh eggs. Love the old folks, they are the best.
So in other words you were doin’ sum bootleggin’ lol 😉
I left good comments on this site and they were not posted.
I have one message for the purveyors of this fear site; Fuck You.
You are more interested in fear porn than the truth.
Rot in hell.