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Sep 29, 2008 10:07 pm US/Central
Current Economic Climate Hurting Small Businesses
CARROLLTON (CBS 11 / TXA 21) ―
Some businesses that rely on periodic loans to help keep their companies afloat are being turned away. Banks are being very selective about giving out business loans - if they grant them at all.
Mike Berdan used to develop prototype cars in Detroit. He brought the love of manufacturing to North Texas where he and his employees create one-of-kind airplane parts.
"We can help customers go from a napkin sketch to an actual part," he said.
But the big projects require large amounts of material, which Berdan typically finances through his bank.
Last week he found out why his bank wasn't getting back to him on his latest application for a loan. Washington Mutual folded and was acquired by J.P. Morgan Chase.
"We were so close to thinking that everything was good and in the last several weeks it's been a big shock to see several major banks just fold," he said.
Business owners are concerned about the banking crisis. Business leaders estimate 35 percent of local companies rely on bank loans to compete.
Berdan only has six employees, but he was in the process of expanding the size of his company. Now he says, he's turning down the big million-dollar projects. He can't afford to purchase the materials using his personal finances.
"It has been a bit of a nerve-wracking and a bit of a struggle to see what our next step is going to be," he said.
B. E. Technologies is fortunate in some ways. Berdan says one of his customers is willing to help make periodic payments before the parts are delivered. So far he hasn't had to lay off any of his employees.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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