According to a recent survey from the American Express OPEN Small Business Monitor, only about 60% of business owners are confident that they will get enough capital to grow. Yes, even with the federal stimulus plans and improved economy, small businesses are still feeling the credit squeeze.

What can be done? Well, it is important to realize that financial institutions are rethinking their credit policies. In fact, American Express has provided some helpful tips to deal with the new landscape (they should know, right?). Let's take a look:

The Obama administration wants to pass a stimulus package of about $700 billion dollars. But back at the ATM customers are finding their credit limits slashed and their access to credit being shot down. About 20% of banks are reducing credit limits for prime borrowers and 60% of banks lowered limits for nonprime borrowers.

Some banks, like Bank of America are closing accounts with zero balances. J P Morgan is lowering credit lines on accounts that show increased risk or are inactive. American Express, US Bancorp, Washington Mutual and Wells Fargo said they would reduce credit lines if they think the customer is a high risk.

Another added problem is that your credit score is based in part on how much you borrow relative to your credit limit. Let's take an example and assume that you have a $5000.00 limit and have purchases in the amount of $1000.00. You have excess credit of $4000.00 and your credit score is based on how much unused credit you have left. Now, if your credit line is reduced to $2500.00, you have only $1500.00 of unused credit. So now you are close to being maxed out and your credit score could be lowered.

Customers can complain to their banks and try to get their credit lines increased or simply close the account.

So, it doesn't really matter how much money the Obama stimulus is, you'll have to pay cash because your credit line has been shredded.

Did you check your credit lines today?

Starting a business can take months -- and can be expensive. Also, it's tough to anticipate some of the problems you'll run into. That's why buying a business can be a good alternative.

So where do you get financing? One approach is to get a Small Business Administration loan.

Basically, this is like any other business loan. However, the main difference is that the loan is guaranteed up to 85% from the SBA, which is a federal program. Because of this, there are usually advantages versus conventional loans, such as:

• Longer terms (10 years for the business, and 25 years if there is real estate involved).
• Lower interest rates (prime rate plus 2.25% to 2.75%)
• Lower down payments (20% to 30% or so). In fact, the down payment also includes seller financing.

OK, what does it take to get such a loan? Let's take a look.

A couple days ago on our sister site WalletPop, forensic accountant Tracy Coenen asked readers for tips on how to help her lower her credit score. Her reasoning? Part of the White House's bailout plan involves freezing the interest rate on adjustable rate mortgages for five years, but only for borrowers who meet certain criteria. One of those criteria is having a FICO score below 660.

Apparently other people are thinking like Tracy. According to MarketWatch:


Should we fault people for trying to game the system? Heck no! That's what systems are for. If multi-billion dollar companies can work out ways to avoid paying any taxes at all, why shouldn't you lower your credit score to save some money on your mortgage?

The fact that the bailout appears so easy to manipulate is really indicative of how stupid it is. Does it make sense to offer a low interest rate only to people with a poor record of paying back loans? Isn't that the exact opposite of the entire point of credit ratings?

Zac Bissonnette is an associate editor with WalletPop, AOL Money & Finance's new personal finance blogsite that covers the financial issues that are important to you in a fun, interesting way.

Congress is holding hearings today to denounce the credit card practice of raising interest rates of customers who pay on time just because their credit score went down. The real investigation should be of the credit reporting agencies and how they determine those mysterious credit scores. Also, a credit score should be available for free at least once a year just like a credit report is free yearly.

This issue should have been part of the new bankruptcy bill that Congress passed in 2005 when it was clear that the credit card company practices of jacking up interest rates on credit cards to between 25% and 30% was helping to push people over the edge to bankruptcy. But Congress ignored the problem and just made it harder to file for bankruptcy.

Why can credit card companies charge so usurious rates? That's because credit card rates are set on a state by state basis and some states allow more freedom to jack up rates. That's why credit cards are based in states like North Dakota or Delaware that allow these outrageous rates.

If someone handed me one million dollars and said "Write an interesting, easy to understand book about credit scores and how to improve yours," I would hand the money back and say it cannot be done. Liz Pulliam Weston is probably one of the only people on the planet who is able to that successfully with her book Your Credit Score: How to Fix, Improve, and Protect the 3-Digit Number that Shapes Your Financial Future.

As a responsible saver and spender, I figured that I knew enough to get by without reading this book. I was wrong. The credit scoring formula is just that: a formula, with all kinds of idiosyncrasies that may cause your credit score to have little do with how responsible you are. For example, as a young person with little credit history, I thought that I could build my credit up by getting a credit card, using it instead of a debit card, and paying it off in full each month. This is certainly a financially sound thing to do, but there's one problem: Surprisingly, it could impact my credit score.

When it comes to predictive data analysis and reporting, Fair Isaac (NYSE:FIC) is the stand out leader in that field. Fair Isaac offers statistics-based predictive tools for the consumer credit industry. You know their talents well. Predictive statistical analysis is the type of methodology used to collar you with your credit score. Fair Issac credit score analysis algorithms are utilized by the three big name credit reporting bureaus, Experian, Trans Union and Equifax. Basic FICO scoring systems have been in use since 1970. The current Fair Isaac credit scoring system has been in use since 1981. In addition to credit risk analysis, Fair Isaac also markets solutions for insurance applicant risk assessment, other financial risk predictors and data management solutions as well.

What might make Fair Isaac a good investment? Well, one thing is for sure. If the company is going to run into trouble they should be the first ones to know. I'll just give you some historical background on the company to enlighten you but I'll have to stop there because frankly when it comes to analyzing analytical analysis, I'd rather be sorting laundry or something exciting like that.