NEW YORK — After two weeks of harried scrambling to save thecountry's financial system, small business owners may be wonderinghow the outcome will affect them down the road.

According to a Sept. 22 Business Week article, the bright spotis the current financial crisis may not hit the small businesssector directly. However, a loss of confidence could have long-termeffects.

“Entrepreneurs should be mentally and financially prepared tohunker down in this economy for a couple of years,” Sam Thacker,finance and credit expert for AllBusiness.com told the publication.“The downturn that started a year ago could last another twoChristmas seasons. I'm hoping it's going to be less time than that,but people are worried.”

The Business Week article noted that credit unions are makingmore business loans than ever before. Bill Cheney, president/CEO ofthe California CU League, said even though a couple of CUs in hishome state have had some difficulties, as a whole the industry iscapitalized well above government guidelines. Additionally, morecalls are coming in from members asking about deposit insurance, hesaid.

“They're asking about the availability of their credit lines andabout deposit insurance. I encourage members to call if they'reconcerned; they'll likely find that local institutions are doingmuch better than the larger ones,” Cheney said.

The article pointed to several areas small business owners willhave to pay extra attention to going forward. Baby boomers, forinstance, will most likely be affected the most by stock market andhousing price downturns. Some who were scheduled to retire may nowbe forced to work longer, Paul Rauseo, managing director of GeorgeS. May International, told the publication. This could be anadvantage for small companies who might have had to spend more totrain less experienced employees, he added.

Because of higher fuel costs, small businesses may also have toraise prices. Rauseo said companies also need to focus more keenlyon their balance sheets, their business models and on how muchcredit they're extending to their customers.

Small businesses should also check to see if their insurancecompany has any ties to financial institutions, the article noted.A company's broker can provide the insurance carrier's most recentfinancial statements or check its credit rating with an insurancerating organization.

Despite the credit crunch, experts said venture capitalists andangel investors view the current environment as the best time tofind good deals, Business Week said. Some private equity firms havetheir own subordinated debt funds, so they can offer debt financingto entrepreneurs even when banks and other lenders will not, JoeTrustey, managing director of private equity firm Summit Partners,told the publication.

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