You might be surprised, but more than 75% of all IT service providers utilize revolving lines of credit to finance their companies (Architel does not).  The average $5,000,000 IT service provider has $200,000 to $500,000 in a revolving credit facility.  Earlier this week the banks who provide these credit facilities, like Bank of America, have contacted their clients and let them know that they may not be able to draw down on the these lines.  This means that these IT service providers may not be able to make payroll in the coming weeks.  In the IT services game, if you miss payroll, your best people will leave to find more stable positions.

We have witnessed two well known IT companies in Dallas miss payroll this week.  We are working with them to transition their clients AND their employees to Architel.  We are increasing our cash reserves in order to help other local IT companies in the event the credit crunch makes it impossible to meet their obligations to employees and clients.  If your IT provider is having problems or if you are an IT provider worried about short term cash needs please give us a call, we can help.