A typical person with debts

See, Snowbooks has no external debt. No overdraft, no loans. We do have a credit card but it is paid off every month and currently the balance is zero (and how else - paypal aside - do you buy goodsandorservices from the internet?). We also have a £10k overdraft arranged with a bank which has never been used - it's there just in case. We have a load of money owed to me and Rob from our initial director's loans (around £60k) but since we're not about to freak out and cancel our lines of credit to our own company, that shouldn't be a problem.

This means we are in rather a nice position, which is good, since the Guardian reports:

"Businesses are also being hit. The balance of lenders reporting a fall in credit availability to firms rose to 36% from 32%. And again, lenders expect to cut credit to firms further."

See, if I was running the business according to accepted financial principles, cash should not be a factor when considering whether to undertake a project. If the NPV of a project after the cost of capital is forecast to be sufficiently positive, then cash should be sought from wherever's convenient. A minority of companies would 'save up' or wait until they had sufficient cash to do a project.

Er, except me. Not for any clever reason; not because I have a sophisticated grasp of financial management. I just don't like the unpredictability of the publishing industry, which makes it hard to forecast sales and cash flow, and I certainly don't like the idea of having an overdraft pulled away from me at a moment's notice, or having to default on a secured loan because of a downturn in sales.

No, my approach to financial management - summarised as 'only spend what you've got' - should stand us in good stead for a while. Phew. Thank heavens I'm silly and unsophisticated.