U.S. banks are reducing their lending at the fastest rate on record, tightening the credit squeeze and threatening to leave many otherwise viable businesses unable to borrow money to expand their businesses, meet their payrolls, or refinance maturing debts.

To counter this, President Obama just presented his plan for helping small businesses obtain loans. The President’s plan calls for money to be made available to small banks from the TARP pool at a low interest rate, and the ceiling for the SBA’s most popular programs to be raised from $2 million to $5 million.

Unfortunately, the changes to the SBA programs require Congressional action, and that could take a long time. Moreover, the money from the TARP pool comes with strings attached, and here is what Cam Fine, President of the Independent Community Bankers of America trade association had to say:

…family-owned banks are not going to want to subject themselves to compensation restrictions imposed by TARP, because it is their own personal money that is the capital of the bank.

Even if banks do get more government money, are they going to loan it to struggling small businesses? According to an article in BusinessWeek, banks are putting much of their available capital into Treasury and other securities. As a result, loans and leases are taking a back seat. Also, banks are complaining that tighter regulation, plus a special assessment to replenish the FDIC, is affecting their ability to make loans.

So, what is a small business owner to do? Well, I’ve been in situations like this before, and, although not pleasant, they can be managed. Some banks are still lending to solid businesses that have a history of profitable operation, so polish up your “public” business plan and spend some time pitching your business to small banks. This is assuming, of course, that you are not already over-extended—remember; banks are not Venture Capitalists.

If your cash situation becomes critical, you will need to look for alternative sources of money, such as taking on a partner, looking for venture capital, or borrowing “hard” money. Alternative sources of money could also include personal resources, such as, home equity loans, family members, credit cards, selling assets (boats, RVs, motorcycles, cars, vacation cabins, etc.) and borrowing from friends.

If you have tried all of these things, and still cannot balance your cash flow, it may be necessary to sell a portion of your business, merge it with another, or cut it down to a manageable size.

Times are very difficult for some small businesses right now, and you may have to do things you likely never thought of when you started your business.

So, stay the course, be persistent, involve your employees and advisors, and don’t give up—you can weather this storm.

The concept is to launch a “denial-of-service” attack, by simply renting enough computer power to overwhelm a “target” site by trying to communicate with it through thousands of computers at the same time. Apparently, neither Twitter nor Facebook was the “target” site this time, but instead, they were victims of collateral damage when someone took down a political site.

You may wonder where all these computers are? Well, they could be your computer, and/or mine—plus tens of millions of computers around the world that are currently infected with viruses that can control our computers on command. These networks of computers are called “botnets” and are rented out by scurrilous hackers on a per-day basis.

There are now so many “botnets” operating that there has been a price war, and a person can now rent 10,000 computers for about $200 per day. This is more than enough computer power to take down a Web site with a “denial-of-service” attack.

Oh yeah, and it only takes about an hour to hook-up with a botnet, pay your money, and set up the attack.

So, there you have it. Anyone can do it, and apparently, you don’t have to be a technical whiz.

Motives vary from hacker to hacker, but can include silencing political opponents, covering fraud, revenge by a disgruntled employee who wants to take down his company’s site, or any other motive imaginable—including plain old vandalism.

Tech savvy people probably know all this, but to me, it was an eye-opener. To read the complete article, click here.

Do you know what’s on your computer?

Venture capital peaked in 2000 and total VC investment today is below 1998 levels. It has been 11 years since the industry has paid out more cash to investors than it has invested. Many VCs annual rate of return to their investors over this period was lower than the S&P 500 Index.

On the other hand, the Super Angel is smaller, quicker, and more interested in more things than their bigger, older VC brethren. They manage smaller funds and cater to the startup, with smaller investments. They have returned to the grass roots of the VC industry, with informal gatherings at the local pubs and eateries where new entrepreneurs gather to make short pitches to a Super Angel.

However, don’t forget: An entrepreneur needs to do their homework—and well! A short pitch (sans Power Point) requires a person to really know what they are talking about. They must be able to present an entirely new business idea succinctly and completely—in a matter of a few minutes.

Most of the Super Angels are also supplying more than money. One of these is Paul Graham and his new-concept VC firm, “Y Combinator.” Graham launched his firm in 2005 and has funded 145 startups to date.

Y Combinator is a hybrid venture capital firm and business training camp. Although Graham makes small investments (usually less than $25,000), he also provides advice, mentoring, technical help, and introductions to later-stage investors. He also periodically feeds his band of fledgling startup entrepreneurs.

So, the time for you to start a new business could be now…if you are properly prepared. Check out Super Angels on Google—then get yourself ready to pitch your new business. Today might be the day you have been waiting for.