Credit Crunch!?

Today I paid off my car. After four years of payments at nearly $600 a month, I own my Volkswagen free and clear. Last month we paid off our delivery vehicle and our entire collection of computers and servers. The month before that we paid off our cutter ($27k), our production digital press ($180k) and our offset press ($400k). We never missed a payment on this stuff. On fewer than 5 occasions, we were late on payments — but not very — and we paid the penalties without complaint. $14k per month in long-term obligations have been reduced to about $3k per month. This is excellent performance…. especially in today’s economy. In 29 years of business, 6 of them under my ownership, this firm has NEVER stiffed anyone. NEVER not paid a bill. We are busy. We are profitable. By every objective, and by most subjective measures Reno Type is doing GREAT. So why have Bank of America and Wells Fargo raised interest rates and reduced limits on our credit cards? Why has American Express decided that, even after a 5 year account history without ever missing a beat on $15-20k charged per month to lower our limit to a point that the account is, for all intents and purposes, useless?

On monday, barring an unexpected phone call, I will be filing suit in small-claims court against a client who won’t pay a legitimate bill, and worse… won’t talk to me about it. I’ve never done this before. But I’ve never been stiffed before, either. I really believed that if you were fair and honest, compassionate and helpful, communicative and flexible, that you’d stay out of collections, and keep your clients out of collections as well. Guess I was wrong. This has been perhaps the most painful lesson I’ve learned since gong into business.

I have associates… good friends and clients who want (and NEED) me to extend them credit. They need the services we provide. I know they’re good for it… they’re my friends… and they’ve helped me in the past. They have GREAT credit history with me. But with my credit being so hammered, I may not be ABLE to extend them the credit THEY need. Something has to give.

When Banks stop acting like banks…. they make folks like me become banks. I may be more profitable and successful (by BILLIONS of dollars) than most large banks, but I don’t WANT to be in the banking business. I’m no good at it (though, arguably, better at it than B of A… in 6 years, the $1100 i’m about to sue over is the ONLY bad debt i’ve ever had).

I hope I never have to ask a client for money up-front for a job. I hope I never have to turn away work because of questions regarding a customer’s credit worthiness. But if I do, I hope they’ll understand that it isn’t a reflection on them, or my trust in them, or my belief in their eventual success… it is because banks who have been horribly mismanaged, have been given hundreds of billions of dollars of OUR money, and who continue to make bad decisions, and decisions not in their own interest, are screwing up business for the rest of us.

hmpf.

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