By Dave Millhouser

In ye olden days, when entire species were facing extinction, dinosaurs didnt scurry around yelling "the sky is falling, were all gonna die!"

I wasnt actually there -- but Im pretty sure what they really said was "Gee, its dark for this time of year and Im getting chilly."

Darwin works slowly. When youre in the middle of great changes, its difficult to know whats really happening, and how its going to turn out.

The sky may not be falling but right now the credit outlook is a bit dark and chilly.

Clearly were in the midst of an upheaval in the financial markets, and it will have an impact on our business. None of the smart folks I speak with are certain just how much of an impact.

Several problems seem likely, but there may be some preventative measures available.

Lenders are nervous. For years they assumed that a loan guaranteed by an asset -- like real estate -- was a safe bet. Theyre re-thinking that assumption, as well as their other asset-based loans. If they cant believe in real estate, what can they trust?

In our industry most of the loans are supported by the value of buses. Since lenders know even less about buses than they do about mortgages, were likely to experience a tightening of credit. With less money to lend, finance companies are going to place it carefully.

This could have a Darwinian effect, and drive weaker companies to extinction. You can decide whether thats bad, or good, based on where you are in the food chain.

Lenders will be more demanding with regard to underlying financial strength. If youre one of those folks who tries to shield profits and assets from the IRS you might want to make some adjustments. If the IRS cant see it, neither can the lender.

Weak companies (or ones that look weak) are going to endure high down payments, shorter terms and pay more interest -- if they can borrow at all. Lenders are squirrelly because theyre being watched, too.

Anyone with a history of paying late will suffer mightily. Do your best to stay current. Youll see more demands to sign personally on business loans, so keep your personal credit up to snuff. You might want to delay that divorce.

CitiBank just swallowed Wachovia. According to one source, that means that 30 percent of the credit available in the U.S. is concentrated in just three big companies. Even if youre dealing with a broker, manufacturer or smaller lender, the finance they offer is undoubtedly derived from one of these big institutions.

Their decisions will ripple through our industry, and fewer lenders may mean fewer options for unique businesses (like motorcoaches). Its reasonable to expect them to be conservative.

It behooves you to adjust the accounting of your successful bus operation to fit their generic business expectations.

Many well-run coach operators dont bother with sophisticated financial statements. When more money comes in than goes out, theyre happy. It wont work in this environment. When you borrow, present your information in a polished manner. Dont think of it as makeup on a hog, but rather as accentuating your inner beauty.

To perform this sort of magic, while retaining your honor (and freedom), its important to work with a sharp accountant. Until the dust settles, the ability to survive may depend on how you appear to lenders.

Try to reduce debt. Delay or eliminate elective expenses and overhead. Credit crunches can be advantageous -- if youre not borrowing.

This climate may affect insurance, too. Coaches are lumped in with other risks (like hurricanes) and premium dollars are invested by insurers in an effort to make money. If investments earn lots of money, they lower rates, in order to attract dollars to invest. Right now, interest rates are low, and the stock market has tanked.

Unless Im missing something, the way they cover losses is to raise premiums, and get picky about who they insure. Now seems a good time to stress safety, and be nice to your insurance company.

The bright spot here is that, once Darwin has his way, there will be survivors. When dinosaurs were out of the way, mammals did great. They were intelligent and adaptable, more able to control their environment.

Mammals are also warm and fuzzy -- not a bad way to be. Nows a good time to cuddle up with lenders and vendors. Keep them informed, work with them so when problems crop up, theyre rooting for you.

Its too early to tell if the sky is falling or this is a passing cloud. Its reasonable to assume that were going to end up with fewer carriers, but the survivors will be efficiently run and more profitable. Not a bad thing -- IF youre a mammal.

Dave Millhouser is a bus industry marketing consultant and freelance writer. Contact him at: dave_millhouser@hotmail.com.