Financing

The credit crunch looks like an espresso machine.

At least it does to Michael McDonald, who is trying to open a coffee shop near UC Santa Barbara next month but just heard that his funding had evaporated for an equipment leasing deal. McDonald needs the espresso maker and other gear in place in two weeks so he can train the first employees for the Zizzo’s Coffee franchise.

“This story is one that is repeated hundreds if not thousands times a day. If you are waiting for a government hand you may be playing a game of chicken with your small business funding”, said Howard Witkin, CEO of Financing.org. “There is no need to wait, Financing.org has sources that can $25-100k in business credit in your hands in as little as 45 days. If you put off your decision and hope for the best you will miss the boat and sink any chance of making it through the current economic tempest”, he added.

“If I don’t get my funding, those are 15 or 20 people who are not going to have work,” said the Goleta resident, recounting his third brush with the credit crisis.

McDonald was squeezed this year when his bank cut off the home equity credit line he was using to help fund his start-up. He had looked into a conventional business loan but found most banks weren’t interested in new businesses, requiring at least two years of operations. And the cost of the money was too high, he said, despite his good credit.

McDonald is just the kind of borrower the federal government hopes to help by its announcement last week that it would make loans more plentiful for small-business owners.

The program, part of the $800-billion credit-loosening initiative unveiled Tuesday by Treasury Secretary Henry M. Paulson, covers certain loans backed by the Small Business Administration, as well as consumer borrowing such as credit cards, auto loans and student loans.

Paulson said $20 billion would be used as credit protection for as much as $200 billion in federal lending.

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