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Thursday, October 16, 2008

The Economic "Crisis" Hits Home - American Express

Oh, how the mighty have FALLEN.

Up until today, I had only "heard" of companies having challenges getting credit. 

For instance, I have seen reports of a company unable to secure a 20k lease for one copier; although they were very creditworthy. 

But today, I spoke with small businesses with a superior credit ratings, and long relationships with their banks and American Express. I mention AE because of their ad campaigns pitching directly at small businesses. 

The Gold, Platinum, Blue, and the newest, Plum. First. An owner of a small business has an 800+ FICO and enough cash in the bank to choke a horse was refused a mortgage on a $60,000.00 cabin in the woods. He could have purchased 5 cabins that day with cash. 

But like any savvy business person, he wanted to use the bank's money - denied. 

 Additionally, he uses American Express to purchase inventory. And with his inventory turns at 30 days, "floating" the cost on an AE card makes sense, and earns him points. His limit was reduced from $65,000 to $16,000.00 in a day; then reduces again to 10k.

OK, now this customer is not complaining - I will do that for him - and I am kinda torn. I actually DO understand American Express's position - credit EVERYWHERE is tightening up, so they need to as well. But - small businesses all over the country have been using AE exactly like this customer and American Express has been urging companies to utilize credit in this manner. Throw in the fact that they are reducing limits without prior notification and get an even bigger mess; a customer service mess. 

My Point - as agents of change, you need to help your clients more than ever before. Help them through difficult times. And it is not easy. Times are tough. This "recession" is not going to last forever and when the turnaround comes, we should all remember who was there with us.

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