User 265729

Paychex Warns About Small Businesses

Bill,

GREAT points! I really hope they take some of the TARP money and directly inject it through the SBA and cut out the middle men who are dealing with their own solvency issues.

Small business IS the backbone of our country's economy!


On Jan 06 08:08 PM billddrummer wrote:

> Hi Judy,
>
> Excellent reporting as usual!
>
> The small business sector is being whipsawed by customers who are
> going out of business or delaying paying invoices, insistent landlords
> and vendors who want money NOW!, and bankers perceiving unmanageable
> risk in extending credit to anyone without 6 months of operating
> reserves and a strong track record. If credit dollars are available,
> they're more expensive than ever, despite the Fed actions designed
> to loosen bank pursestrings.
>
> Small business customers have depended on the banking sector for
> startup capital through the SBA program, among others, operating
> cash with lines of credit and factoring services, equipment and capital
> improvement financing, commercial real estate lending for expansion,
> and buy/sell arrangements, to scratch the surface of what's available
> (or what was available) through commercial banking channels. These
> products appear to be stymied by a perceived higher risk premium
> when lending to small business.
>
> In my view, unless lending becomes more plentiful for small businesses,
> the sector will continue to struggle. Perhaps giving tax breaks to
> banks for small business lending would unlock the credit markets
> to this vital part of the US economy.
>
> ATB,
>
> Bill
>

Paychex Warns About Small Businesses

There are far too many younger people in business who have never seen really hard times. Over the next few years they may get a taste of it...


On Jan 06 07:21 PM Crocodilian wrote:

> Good article. Paychex and ADP are both well run shops, and this is
> disturbing. Most troubling is:
>
> **********************...
> "[For] the overwhelming majority of our clients... I would have guessed
> that there would be a larger decline of employees in existing clients
> than there is. It’s down, but it’s down ever so slightly... It has
> been a surprise to me.
>
> Quite frankly, it would be hard for me to imagine with what we’ve
> been through over the past six months that it’s going to get a lot
> worse and cause a much greater business failure scenario for our
> clients. But again who knows?
> **********************...
>
> What strikes me about the conf call language is the tentativeness
> of it-- for a business that's really a rock solid numbers and execution
> play, its unusual to hear "who knows?", "surprise", "hard to imagine",
> and "guessed" jammed into two paragraphs.
>
> Everywhere I look, I get the feeling that businessmen have arrived
> in an unfamiliar land, and are at best disoriented.

Paychex Warns About Small Businesses

Roger -- It is Gerald Celente and his website is:


www.trendsresearch.com/

BTW -- he is very accurate and is used by most of the major media as a resource.

On Jan 06 05:28 PM Roger Knights wrote:

> This report fits in with trends/futurist Celente's (sp?) apocalyptic
> warnings that over 100,000 small businesses will go bust.

Paychex Warns About Small Businesses

Judy,

Excellent...

Small business has been overlooked in this whole crisis. Small business is (or was) responsible for most of our country's job growth for several years.

The Fed should do something SMART (if they can do anything that would be considered smart) and pump a lot of those TARP $$$ through the SBA -- PLUS give small business a BIG tax break. I think it would be wise to give the self-employed a tax break too -- it would encourage those who are out of work to engage in entrepreneurial activities.