Tighter credit markets for big and small businesses have continued to add fuel to the debate in Washington over whether there should be a bailout on Wall Street and even if there is, whether the resulting economic slowdown will lead to more job cuts and higher unemployment rates.
"Companies don't have access to short-term credit to fund operations, and if you can't fund operations you'll have to cut back on spending," said Jim Kaitz, CEO of the Association for Financial Professionals.
Among companies that could be particularly hard hit are retail stores, most of which use short-term loans to fund holiday inventories.
Nearly half of those surveyed in the past two months by accounting and consulting firm BDO Seidman said their lenders had tightened credit.
More than a third said they'd be forced to buy less merchandise this year, stock reduced inventory or considering cutting staff.
The same trends are playing out at bigger companies across other industries, Kaitz says.
Very big companies have yet to take similar actions, but "they're worried because their customers and suppliers are not OK," said John Castellani, president of the Business Roundtable, which represents large U.S. companies.
Yet even companies as big as AT&T are finding that access to money isn't as good as it was even three weeks ago, The Associated Press reported.
The failure of Congress to pass a bailout package has only increased worries, said Jack Albin, chief investment officer at Harris Private Bank.
Waste Connections, a California-based waste hauler with $1.2 billion in annual revenue, said its borrowing costs have more than tripled despite a good credit rating.
Elsewhere, firms as diverse as Carmike Cinemas Inc., the third-largest U.S. theater chain by screens, and Duke Energy Corp., have scrambled to make financial cuts.
Carmike suspended its dividend, while Duke Energy, owner of utilities in five states, tapped $1 billion from a credit agreement.
The paralysis in credit markets is changing how U.S. companies do business as banks pull back on loans or make them prohibitively expensive.
Some companies are closing plants and stores, postponing takeovers and grabbing any available credit.
"It's impossible to quantify how expensive this crisis is going to be for corporate America; there's unlimited downside," said Alec Young, a New York-based equity strategist at Standard & Poor's.
Slumping auto sales and surging borrowing costs also may shut down as many as 600 new-vehicle dealerships this year, according to the National Automobile Dealers Association.
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