We have heard that small businesses are struggling today, particularly with credit. A post in the New York Times' small business blog "You're the Boss" provides a tangible example. Jack Stack, founder and chief executive of SRC Holdings, explains how his daughter Meghan had trouble getting a credit for a small business she recently acquired -- despite the good credit history she had already established as a small business owner. Her original company is Staxx, a clothing retail store.
Despite the business's good track record under its prior owners, both of whom also had good credit, Meghan was turned down by every major credit card company out there. The suppliers who had worked with the prior owners also shied away from giving Meghan terms until she established herself as the new owner.
Meghan was surprised at this because when she opened Staxx, she had to turn away people who wanted to give her credit. When she asked why, she learned another one of those dirty little secrets: she was told that her credit had been run too many times over the previous three months. In other words, the more she applied to get credit, the worse her chances of obtaining it became because her score kept getting worse.
Read the full story at the You're the Boss New York Times blog.