The Cultureship Blog

Yes, |I’m talking about a Credit Curse, not The Credit Crunch.

“The Credit Crunch” has by this stage got something a historic, clichéd ring about it. It’s something to do with very big banks which either went bust, or didn’t quite – and were then bailed out by the taxpayer…..and then kept coming back for more.

It’s an abstracted technical term which doesn’t really capture the ongoing and, if anything, the increasingly severe implications for smaller business – hence “The Credit Curse”.

I’ve come across three quite separate examples just yesterday.

A friend who runs an online services business was telling us over lunch over he has completely changed his payment ethics. He said, ”I don’t pay now unless people are screaming. You have to be like this, even if you don’t like it, just to survive.”

Another friend, a web designer, told me how he has become much organised and determined in charging for his time, saying, “People are expecting more and more for less, or even free. They are phoning me with what seems like small queries – the kind of thing normally I’d just deal with – and then trying to slip more and more into that space between a quick query and formally charged work. I simply can’t do it all for free in this way.”

A third friend described to me the stresses within her commercial properties rental business. It has taken until now until strain has begun to show on a fair few of her client businesses. Other items would appear to have been cut in the face of some ongoing poor trade – but now the recession is beginning to bite deeper on some really core expenditure, like rents.

“These are mainly honest and hard working people, who would have come straight to us in the past if they had any difficulties. Now they are ducking and weaving, not always being straight with us about what is going on,” she said.

It’s a Credit Curse in that it is having a widespread and damaging effect on business ethics. Like desperate shortages for food often brings an ugly and primate survivalist selfishness in its wake, so the chronic shortage of cash is making things morally ugly in the business environment.

- It’s no mere Credit Crunch out there for a lot of businesses in the sense of there being a shortage of project capital; there’s widespread evidence of a Credit Curse, with money and goodwill getting very tight all round as slack in the trading chain simply runs out. This is no mere technical monetary thing in the upper reaches of the financial system.

It’s dog eat dog – and it’s ugly.