ORANGE COUNTY IN BANKRUPTCY : The Little Creditors Are Feeling a Big Pain : Impact: Small-business owners dismayed at county halting payment of bills. Many operate on tight margins and need the cash to pass on to vendors.

When Sandy Schroeder learned Thursday that Orange County would halt payment of its outstanding debts, her heart sank.

“They owe us $4,010.13!” Schroeder said, checking the books of the small Fountain Valley business she co-owns, Datron Peripherals, a three-person company that supplies computer accessories to John Wayne Airport and the Orange County Sheriff’s Department. “I didn’t realize it was that much.”

She sighed heavily and didn’t speak for several moments.

“They’re not going to pay anybody? That’s what they said?”

That was exactly what county officials were saying Thursday--but they said little else. Clerks answering the phones in the county auditor’s office were instructed to read a short, blunt statement to anyone inquiring about due bills.

“If you are expecting a payment, checks are not being released today,” the clerks recited. “Our office is consulting with counsel on the impact of the bankruptcy filing. We don’t know what the answer will be, but we hope to resume issuing checks within a few days.”

The news did not sit well with any business owner listed in the 386-page U.S. Bankruptcy Court document cataloguing the county’s many creditors. But while large companies could perhaps absorb the shock, small-business owners, who often live payment to payment, were chafed in a big way.

“God, what a time for something like that to happen,” Schroeder said. “Business in general is tough enough in the first place, without having to worry about them. “

Schroeder said she now cannot pay her own vendors, which may ruin her credit with them, which may make it more difficult to buy more supplies.

But all of this was speculation. One thing about her future was sure: “Obviously, I’m not going to do any more business with them,” she said of Orange County.

Same goes for Larry Marx, co-owner of the Marx Brothers Fire Extinguisher Co., a Los Angeles-based company that is owed $4,700 for equipment sold to the Orange County Fire Department.

It’s safe to say that Marx’s faith in the county has been doused. From now on, he said, he will ask for cash on the barrelhead.

Just hours before the county’s announcement Thursday, Marx had been calculating the county’s hefty account with his firm. He had delivered $1,900 worth of extinguishers to the county a few hours before the bankruptcy filing Tuesday.

“I have a feeling that we’ll get our money,” he said, not sounding as if the feeling was a strong one. “It’s just going to take a long time to get it, and we don’t like that, because of the economy right now. It’s terrible that one organization can mess it up for so many people.”

The mess was creating a mega-emergency for Sharon Tipple and Jane McCloud, two registered nurses who own a struggling business called Tip of the Cloud, which landed a county order only days ago for 310 first-aid manuals.

“This is major for us,” Tipple said, frantic. “I don’t know what we’re going to do. . . . They owe us $1,849.77. They just bought our biggest order that we’ve ever shipped.”

When Tipple and McCloud landed the account last week, they thought they’d finally arrived.

“There’s a real feeling of safety when you do business with the county,” McCloud said.

“The main thing is that, right now, every penny we make we try to put into advertising, so people know more about the project,” Tipple added. “This is going to put a big glitch in our marketing plan.”

Schroeder said: “When you’re this small, as we are--there’s my partner and I and we have one salesperson--even a thousand dollars to us is a lot of money. And when you operate on small margins, like we have to in this kind of market and this economy, it puts a tremendous strain on us. We count on that money coming in.”

Richard Van Dyke had counted so heavily on the government money that he was contemplating layoffs Thursday night. He didn’t know precisely how much the county owed his fax business, Imaging Plus of Irvine, but if it was $5,000, as he suspected, he would let one employee go. If it was $10,000, he would be forced to let two employees go. And so on.

Even among small-business owners who won’t feel an immediate pinch from the county’s freeze on payments, there was white-hot anger at the inconvenience.

“Somebody doesn’t pay me $200, it irritates me no end, I want to go out and wring their neck,” said Mike O’Grady, owner of K’West Printing in Orange, which does work for the county Health Care Agency.

But the county’s debt with O’Grady is closer to $1,500, he said, which makes it 7 1/2 times as irritating. Plus, he fumed, the payment will eventually consist of his own tax dollars.

“So the check is in the mail?” said Richard Black, owner of Black’s Furniture in downtown Orange, to which the Sheriff’s Department is indebted to the tune of $1,807.73.

Black could only laugh wryly. After weeks of dunning the county for his money, he’d been told that the county cut his check this week. Then he heard that the county is freezing all payments.

So Black made some calls Thursday and found that, indeed, his relatively little check was one of the last to be frozen.

“It was one day shy of getting cut and mailed and sent out, and now it’s on hold,” he said. “For a business like ours, it’s something that’s going to eventually work its way down to somebody else that’s going to have to be delayed.”

Earlier in the week, Black said, he knew Orange County’s bankruptcy filing would rear up and bite him, but he couldn’t figure out how.

“I said, ‘You know, there’s something that I’m not remembering here, and I know somehow this thing’s going to affect me personally.’ ”