Small businesses are suffering
Eric Schmidt CEO of Google
In response to the economy, small businesses are looking to the installment loan. Like all businesses in the economy, small businesses are stretching to find customers. Unfortunately with today’s market, customers are hard to come by.
Most Americans are feeling the recession one way or another.Whether it’s a job loss, cut in pay or adjustable interest rate increase, people are having to be more innovative than ever to make payments. This frugality is affecting small businesses dramatically because with people cutting their spending, businesses are having to cut back also.
It’s not always possible for the small business to cut back without utilizing lay-offs and serious financial restructuring. This puts more Americans in the position of having to strictly budget themselves. It’s a vicious circle that is only hampering the economy from recovery.
Google and the Economy
“No company is recession-proof,” stated Google CEO Eric Schmidt. “We are absolutely feeling the impact.” In the beginning of 2009 Google was able to make a profit, but only because of cut-back tactics like lay-offs and winnowing expenses. The company is doing better than most businesses because their marketing is minimal cost compared to media other companies use. But doing “better” isn’t the same as thriving. The company recently experienced two-rounds of job cuts and shaved its capital expenditures down by 40%.
Google is a household word and has made headlines for their tremendous revenue, almost all of which is from advertisements. Executives are predicting that the company’s Q2 and Q3 will not revive since the past has shown that these are weak times in their growth. With a recession added to the mix, Google is expecting to have a lean 6-months to get through.
In addition, consumers are being more and more cautious with spending and taking time to shop around for good deals. Google relies on ad placing by consumers, but the amounts of clicks to turn into profits is drastically lower than it has been. For example, it now takes 15 to 20 clicks to sell, as opposed to the normal 10 to 15 in the past. This consumer wariness caused price per click on search ads to fall 13% in Q1.
Where and when will small businesses find relief?
Installment loans may be the most viable option for small businesses since any real improvement in the recession is estimated to happen mid-2010. So for more than a year, businesses are going to be forced to maneuver through the economic struggle and find ways to cover their debt. With new customers hard to find and old customers cutting back, income is threatened.
The only relief is to find non-traditional lenders and take advantage of their availability. Non-traditional lenders work with customers to create manageable and quick loans that are not dependent on credit ratings or collateral. Customers can apply easily and their application status is almost immediate. If qualified, getting money can be a life-saver to the small business that has no other options for funding due to the market.
The cash crunch
If an industry giant like Google is suffering, all corporations need to be careful. Small businesses are feeling the cash crunch more than ever in today’s economy and looking for innovative ways of managing debt. The installment loan may be the easiest answer.
Despite more drastic turns like lay-offs and expense-cutting, businesses are still finding it difficult to manage. Creative funding options offer a much-needed relief to organizations in need of help meeting their budgetary deadlines.
