Companies can't get the cash to keep going strong

— -- Tight credit markets continue to increase pressure on businesses far from Wall Street, fueling concerns of reduced spending and future layoffs.

"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," says Jim Kaitz, CEO of the Association for Financial Professionals.

Retailers, who use short-term loans to fund holiday inventories, may be particularly hard hit. 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 buy less inventory this year. One in four said they have had, or plan to have, staff reductions this year.

The same trends are proving true for bigger companies across other industries, Kaitz says. AFP's recent survey of several hundred companies with more than $500 million in annual revenue found that 40% said they'd had their credit tighten in recent weeks. Two-thirds of the companies took actions to compensate, including reduced capital spending and hiring, the survey said.

Very big companies have yet to take similar actions but "they're worried because their customers and suppliers are not OK," says 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 only increased worries, says Jack Albin, chief investment officer at Harris Private Bank. "Any CFO in position to secure lines of credit was on the phone Monday," he says.

Some companies have taken different steps. Waste Connections, a California-based waste hauler with $1.2 billion in annual revenue, sold 12.6 million shares last week to raise $400 million to get it in position to fund future acquisitions, CEO Ronald Mittelstaedt says. In the past, it would've financed such deals with credit. But Mittelstaedt says borrowing costs have more than tripled, despite a good credit rating.