Global Credit Crisis Hits Home for Local Businesses and Customers

"That represented about third of my income gone in one day," Hoskins said. "The jobs I'm getting now are little jobs because people can't get approval for the big ones."

He can tell that his competitors are also suffering; a job that would have attracted two or three bidders last year now draws a swarm of six or seven contractors eager for work.

"It's gotten cutthroat," Hoskins said. "The profit margins are cut in half. For the folks who do have money, it's a great time to get work done."

Bill Hart, general manger of Strosniders Hardware in Bethesda, said he can tell things are getting a little chaotic one step up the supply chain. His deliveries from Ace Hardware had been as regular as clockwork for years until about three weeks ago, when suddenly the trucks began arriving off schedule and with drivers he had never seen before.

"We had guys who couldn't find us, and we've been here since 1953," Hart said. "One guy went the wrong way on the Beltway."

When he called to complain, he said, Ace told him that with business off so sharply, it was consolidating deliveries into fewer trucks.

Customer traffic is down about 4 percent from last year at the three Strosniders locations in Bethesda, Silver Spring and Potomac, Hart said. And charge-account sales, mostly to contractors, are down about 8 percent.

His own credit with suppliers has remained solid, Hart said. "As long as we pay our bills, we get merchandise."

At Bull Run Lumber & Millwork in the Manassas area, business owners are now much more vigilant about the limits on the in-house charge accounts of regular corporate customers.

"We've had a few surprises with people in the past who have always come through for us," said President Julie Emery. "People aren't doing the projects they had intended to do because of the general fear."

Aside from keeping closer tabs on the stragglers, Emery said, regular meetings with rival companies alert her to which customers are having a tough time paying off debt.

"We had a kitchen remodeler come in and buy $35,000 [worth of supplies], and we asked for $20,000 upfront," Emery said. "Maybe before, there was time when we charged half upfront."

Thomas Plumbing in the District has found that customers who were once willing to pay in advance are now trying to negotiate terms.

"We do contract work," said office manager Kerry McCoy, "and normally we ask for three-quarters of the payment upfront. People have been asking to make that one-third down, one-third [when the job is half-done] and one-third upon completion."

The biggest problem that the 60-year-old firm faces has not been lack of credit but suppliers who are dealing with their own credit and recession fears by cutting back on inventory. "We call our supply houses and say we need a particular part, but they don't carry it the way they did a year ago," McCoy said. "They can order it, but that's a wait of a week or 10 days."

Staff writers Anita Huslin, Steve Hendrix and Ian Shapira contributed to this report.