Like many of you, I’m sure, I have been glued to the news…online, on screen and in casual conversation. If you’ve actually figured out what when wrong with the debts and swaps and mortgages and hedges…you’re way ahead of the Wall Street mavins and most of the rest of the world.

To most Americans, the real impact so far has been watching 401Ks and various other stock accounts plummet in value. To others, the inability to acquire a mortgage has been the only real sign of trouble.

But, like most businesses, small and medium-sized ones have a different take on the situation. As they are closer to the credit markets, the real impact of a tight market for money impacts entrepreneurs first.

Businesses need money to grow, to meet short term obligations like payroll and to pay suppliers. The immediate impact of the credit crisis has been increased borrowing costs for short-term loans. For manufacturing based businesses that rely on working capital to fund purchases this creeping interest rate increase means either a profit squeeze or potentially increasing prices which, as we know, should be undertaken with caution in a recessionary climate. For any business with employees, tight credit can mean the ability to meet payroll each month is compromised.

Add to that, how Entrepreneur.com puts it:

…. most small businesses are constantly struggling to get the capital they need to launch and grow their businesses. This is especially true when the founders have poor personal credit, as so many displaced corporate workers and other potential entrepreneurs do now.

So you may be concerned and probably should be. Most entrepreneurs are.

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