This financial vulnerability starts to show whenever the good times take a breather. Based on his surveys, borrowing activity and loan rates have both been increasing of late. Their No. 1 source of credit is credit cards. Their No. 2 source is home-equity loans. In past downturns, for example, Donna Myers, owner of DHM Group, a marketing- communications firm in Holmdel, N.J., has seen clients cut back on advertising.
Debt is the first thing most small-business owners start to think about.
It's also the first thing their creditors consider. In Michigan, where the auto industry is an integral part of both the economy and the local psyche, the recent idling of several Chrysler plants has been sobering. You don't expand. You don't buy a bigger house. You just wait and see.