“Once you’ve hit the end of extraordinary measures, you’re borrowing authority is gone, you’re then left with cash,” Treasury Secretary Jack Lew said during a recent appearance before the Economic Club of Washington. “And as any small business person knows, if you’re operating your business by relying on cash in the cash box to pay your daily bills, if your revenue is not adequate on a given day and you empty your cash box, you can’t pay all your bills.”
Lew has since said that the government will reach the end of its line of credit no later than Oct. 17.
“I can’t refill the cash box once we have lost our ability to use extraordinary measures,” he said at the forum, later adding that “we are getting very close to these deadlines and we need to get going.”
It is a scenario all too familiar to small business owners right now, as the lending market and private capital tightened and have been slow to rebound in the wake of the recession. Some researchers, meanwhile, have found that the freeze on Main Street started more than a decade ago,and it may linger even after the economy recovers.
On Small Business reached out to small business owners around the country for their opinions on Lew’s analogy and any advice they would give to a government dipping into the cash box, or worse, shutting down the government, even temporarily. Here’s what they had to say.
Carol Supplee, owner of Imagine Artwear, a craft gallery in in Alexandria, Va.:
“Secretary Lew’s analogy to small businesses is totally apt. If I don’t pay my suppliers, my rent, utilities, security, insurance, employees, business licenses and taxes, I will be out of business in very short time.
“When I watched sales start to fall in December 2007, I started planning for worst-case scenarios. I sold some securities to reduce debt. I worked harder to make the assets on hand pay off more, and I paid all my bills on time. It had to be business as usual, tighten the belt and soldier on. Honor all commitments or fail.”
Nancy Clark, owner of Glen Group, Inc., a marketing and advertising firm in North Conway, N.H.:
“The difference with small businesses is that we find a way to keep our doors open, lights on, and people employed. So many of us have been in this exact situation and we don’t threaten each other, but we work with our employees, our friends, our colleagues and we find a way to survive without shutting down.
“My advice to elected officials and policy makers? Run it like a business. Collaborate. Don’t give up, and figure it out. We have all survived and stayed open, and the government can, too.”
Zachary Davis, owner of the Penny Ice Creamery in Santa Cruz, Calif: