If you’re a small business owner, it’s likely you’ve used credit to fund some aspect of your company. That makes the upcoming days more critical: the national debt ceiling must be raised by August 2, or the U.S. will officially default on its debt. What does that mean for you as a business owner - and what can be done to prepare?
Here’s the deal: right now, the debt ceiling is set at $14.3 trillion – and we’re almost there. If it’s not raised, the U.S. is forced to default, making it even more difficult for a small business to get credit or take out a loan. Even if getting credit has been easy so far, the new and higher interest rates may maim your business. And small businesses have had a hard enough time gaining credit since the economic disaster started in 2008.
Most small business advisors say to minimize financial risk. That’s sound advice in any situation when you’re a new business owner, but it’s difficult to avoid borrowing when you’re not pulling in a lot of cash. They also suggest to reallocate your budget – now – and prioritize expenses.
Small businesses spur job creation. According to experts, this, and the fact that both Republicans and Democrats want to avoid another economic crisis, is why the issue will likely be solved soon.
One can hope, but in the meantime rein in your use of credit.