1,316 Mass layoffs were reported by the United States Department of Labor in September 2012. These mass layoffs resulted in a total of 122,462 total layoffs as measured by new filings for benefits for unemployment insurance. The bureau reported that each mass layoff resulted in at least 50 employees that were terminated for any one given employer.
The Department of Labor reported further that there were 49 more mass layoffs events in September than in August of 2012. In September, 366 mass layoff events were reported solely in the Manufacturing sector for the month which resulted in 39,748 initial unemployment claims. 13 of the 19 major industrial sectors reported an over the year decrease in initial unemployment claims.
When it comes to business financing, how important is time in business in the request? Time in business, in addition to credit and the amount of the request is one of the main items that are considered.
If the time in business is more than 3 years, this will help the request the most and will strengthen the request. If the time in business is less than 3 years, it will weaken the request, especially if the time in business is less than 2 years. If a company started out as a sole proprietor then switched to a Corporation, the total time in business will be considered. For instance, if a business was unincorporated for 2 years, then the company switched to a Corporation and has been a Corporation for 3 years, the total time in business that it can be considered is 5 years.
The company need only provide old business licences to demonstrate the full time in business. This is especially important because in most states the Secretary of State does not show the history of unincorporated businesses and only shows the time in business for Corporations. If the company does not keep the old business licenses, they may only be able to easily prove just the 3 years in business in the previous example, instead of the total of 5 years.
In the business loan environment, one of the approval factors that is often overlooked is the amount of the request.
The main factors that are most often cited are the time in business, personal and business credit, type of business. However, one of the biggest factors that is never discussed is the amount of the request. All other things equal, it is far easier for a company to be approved for a $10K or $25K loan request than for a $100K loan request. Also, if a loan request is made for $100K, it may be declined for $100K whereas it might have been approved for $25K.
In such a case the applicant could be shorting themselves of funding by applying for too much money. Many applicants believe that they should apply for as much as possible. This is incorrect. Applicants should apply for roughly the lowest amount they feel they need funding for.
Larger businesses almost always obtain financing solely in the name of the Corporation. At what point should a business begin obtaining funding solely in the name of the Corporation rather than having the owners sign as guarantors?
There are no specific and clear rules in this regard. One of the first issues to look at is the amount of the loan or financing. Once the amounts begin to go over $50,000 or $100,00 0 and beyond, these are amounts that should not be done with the owner signing, if possible. This is moreso true if the business begins to have a higher number of employees. There are Dental practices, Medical practices and legal firms for whom such amounts it may still make sense for the owner or owners to sign. However, if the company has 35 or more employees and generates significant revenues such as in the millions of dollars, then in most cases the financing should be done in the Corporation’s name only.
Would Romney trigger a trade war with China? Mitt Romney has said he would designate China as a currency manipulator on day one in office. This could trigger a trade war. Would we be better off in the aftermath of a trade war with China or worse off? Trade wars rarely help either side, nobody wins. It very likely is best to avoid this result.
Mitt Romney has stated his position that, if elected as president of the United States, on his first day in office he would designate China as a currency manipulator.
That sounds tempting because currently, many domestic companies suffer due to cheap Chinese imports. However, as in chess, that will not be the last move. If that occurs and tariffs are placed on Chinese goods, allowing U.S. companies to more fairly compete, the Chinese will almost certainly place tariffs on goods U.S. companies are trying to export to China. As the second largest economy in the world, this would have major negative consequences on both sides once a trade war begins. The question will need to be asked, are the downsides of not designating China a currency manipulator lesser or greater than to designate China a currency manipulator? Scenarios would have to be gamed out and domestic politics should be taken out of the equation.
The politicians know that if U.S. companies begin to severely suffer, it will be tied back to the designation of currency manipulation as the trigger. Even if politicians confuse the issue with double talk, companies that suffer economically will be highlighted and the subject cannot be evaded.
The latest fiscal cliff is coming again, this time either in December or soon afterwards to a theater near you. A political theater more specifically.
Chances will be far greater that the budget will look a lot more like it does today rather than what it what it would look like if there is no compromise and the fiscal wall is hit. The primary reason for that is that the politicians know full well that while many citizens say today that maybe we need spending cuts that deep in order to fix our fiscal woes, once they spending cuts actually started hitting and people are shorted significant money in the programs that are cut, the instant screams would be so loud they might rival what has happened in Greece.
If that is questioned, simply look at the 99% movement and remember that those protesters weren’t losing any money. If programs such as unemployment insurance, medicare, social security, military programs, highway money, education all took 40% cuts, there is an absolute guarantee that the public’s opinion about the merits of large spending cuts would change very quickly, for the negative.
Will hiring take off after the election? There seems to be some reasons to believe so.
Chief among these reasons is probably the fact that the unemployment rate is declining just before national elections. This is relevant because larger companies traditionally wait until after elections before proceeding on any business changes, including expansion, hiring and any significant changes.
Companies wait not just because they may proceed or not proceed depending upon who wins. In many cases, companies will proceed with their general plan or direction regardless. The results of the elections will give them certainty on many details such as specific regulations, philosophy of the government. Simply having certainty on certain details may be more important than the actual results.
Since unemployment just went down, this may well be a precursor for after the elections, since hiring should increase in the months after the elections due to the certainty the results bring, which causes companies to stop holding back their hiring process.
Paul Ryan has pushed for a grand Medicare reform. The downside to Ryan’s plan is that it is not really a plan at this time, it is really nothing more than a Grand idea. Ryan has not provided any information for even the most basic questions that any future Senior would want to know.
However, we also know that Medicare in it’s current format is not sustainable. Both parties have agreed to this fact. If Medicare is not overhauled for the long haul, it seems that the Obama administration has not given a detailed long term plan of how, in the absence of the Ryan model, it’s plan would make Medicare solvent long term.
It seems that both parties know that if they spell out the details now, it will require either a large infusion of cash or reduced benefits. Neither of these are anything good to tell the public if you are a politician running for office or running for re-election.
So why doesn’t some politician with courage simply come out and say a price will need to be paid, nothing is free? A huge gamble like that will either sink that politician like the titanic or make them the rock star of a generation. It depends on who says it and how they deliver the message.
Is the housing market turning the corner? The ill fated housing industry, long sullied and cast out for the next generation, has made a legitimate comeback on some cities and regions, such as Seattle, Portland and other areas.
To be sure, there are still foreclosures to wind through. The key question is if the housing sector has turned enough of the corner in enough cities, then it can go back to becoming a major driver for the economy. In the last 50 years, housing has almost always been a leading indicator to a recovery and for a recovery. That is, housing has historically led the way in recoveries, except this time due to the specific disasters that occurred this past decade in the industry.
If housing can further recover, it can speed up the recovery and push the overall economy back with it. The next 6 to 12 months will provide a great deal of evidence if this is the case or if the housing resurgence in several markets are exceptions to a problem that will still take a few more years to get back to full strength.