Category Archives: News

Should the Government make small business loans directly?

Currently the Government does not make loans directly to businesses.   The SBA, a well known government institution, does not make loans directly.  The SBA only guarantees loans that banks make.   As long as the banks follow certain specific guidelines that are set by the SBA, then the SBA guarantees 80% of the loan in case of default, which allows the banks to feel comfortable and secure in making the loans.

However, should the Government begin making loans directly to small businesses?   There are some reasons to consider doing this.    During the time the Government was bailing out the banks and trying to get the economy going, they wanted small businesses to start getting loans.   So the Government gave billions to banks with the instructions that the banks would begin lending the funds out.     By many accounts, much of the money was not lent to small businesses, but rather hoarded by the banks.

The Government should consider starting it’s own direct lending department.    Fully credible loan officers could be hired and the department could be staffed.   Critics might well say that the last thing the economy needs is more Government intervention in the economy and more Government control.

However,  if the Government identifies certain industries they want to lend to, then currently they have to ask the banks to focus on those industries and there are no assurances the banks will do so.   Direct lending would eliminate the middle man.  Even though the Government would be lending themselves, simply eliminating large corporations in the middle of the process should speed things up dramatically.

Do deficits matter to the U.S. Economy?

Do deficits matter to the U.S. Economy?    Will having large, annual deficits harm the U.S. Economy in the long term?

It was widely reported that former Vice President Dick Cheney said that deficits do not matter.    The amount of the deficits and the length of time of the deficits will dictate whether they matter and will be a burden on the U.S. Economy.     To simply say that deficits do not matter is not incorrect if the deficits are small and for only one or two years.

If the issue is large deficits for many years, then deficits do matter great deal.   Currently, the government is using approximately 10% of revenues to simply pay interest on the current national debt.     This means that the Government only has approximately 90% of the funds it takes in to actually spend.   Every year the Government runs a large deficit, that percentage goes down.

So deficits do matter.  They need to be cut and eliminated, plain and simple.

Do Deficits matter resource page

SBA Community Blog and Forum –  Blog and Forums by the SBA, Small business administration.   Questions can be asked and answers provided.

More do deficits matter resources:

 

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Gas prices spike $.31 in August

Gas prices have spiked $.31 in August to an average of $3.83 per gallon.   This price beats the previous Labor Day high of $3.68 set in 2008.

Some of the increase has been attributed to Hurricane Isaac.    AAA estimates that approximately 33 million Americans will travel 50 miles or more, including 28.2 million by car.

SBA Community Blog and Forum –  Blog and Forums by the SBA, Small business administration.   Questions can be asked and answers provided.

U.S. Department of Commerce – Helps american businesses become more innovative at home and competitive abroad.

U.S. Bureau of Economic Analysis – Provides statistics on consumer spending, corporate profits, travel and tourism and much more.

Entrepreneurworld – Resource for Entrepreneurs, including starting your own business, growing your business.

Bureau of Labor Statistics – Provides companies with up to date information on employment, demand, hiring, productivity and other information that may be useful to companies.

International Trade Administration – Creates jobs and economic growth by promotingU.S. companies abroad to governments in other countries.

More Small Business Loan resources:

Department of Labor – Provides information on many labor issues that can be useful to companies, such as insurance, regulation, wages, wage hours, compensation, safety and health

U.S. Patent and Trademark Office –U.S. office to file patents to protect a companies new or existing proprietary products.

U.S. Trade and Development Agency – Promotes U.S. Exports to Foreign Countries, please review if your company is interested in exporting goods to foreign countries.

CEO Refresher – A monthly newsletter on creative leadership ideas. Short articles, brief book reviews, models, management tools, quotations and commentary.

E-Network for CEOs – Online articles and much more for CEO’s

Public Radio Planet Money – All issues money related to the public.

Foreign Born High School Dropout rate far surpasses native born

According to recently released Government statistics by the bureau of labor statistics, the percentage of foreign born residents in the United States that did not complete High School far exceeds the same statistic for native born.

The percentage of Foreign born living in the United States today that did not complete High School is 25.5%, versus 5.3% of native born.    The percent of foreign born that completed at least some post High School education was less than native born, 17.5% versus 29.9% for native born.

Where this comparison does not follow as drastically is for bachelor degrees.   The percentage is approximately 31% versus 36% for native born that have a Bachelor’s degree.

Small Business Loan Resources:

SBA Community Blog and Forum –  Blog and Forums by the SBA, Small business administration.   Questions can be asked and answers provided.

U.S. Department of Commerce – Helps american businesses become more innovative at home and competitive abroad.

U.S. Bureau of Economic Analysis – Provides statistics on consumer spending, corporate profits, travel and tourism and much more.

Entrepreneurworld – Resource for Entrepreneurs, including starting your own business, growing your business.

Bureau of Labor Statistics – Provides companies with up to date information on employment, demand, hiring, productivity and other information that may be useful to companies.

International Trade Administration – Creates jobs and economic growth by promotingU.S. companies abroad to governments in other countries.

More Small Business Loan resources:

Department of Labor – Provides information on many labor issues that can be useful to companies, such as insurance, regulation, wages, wage hours, compensation, safety and health

U.S. Patent and Trademark Office –U.S. office to file patents to protect a companies new or existing proprietary products.

U.S. Trade and Development Agency – Promotes U.S. Exports to Foreign Countries, please review if your company is interested in exporting goods to foreign countries.

Thank your for visiting our Small Business Loan resource page!

Will Super committee cuts affect small business?

Super committee cuts small business

The super committee was established to recommend solutions to the federal budget deficit. It’s due to report recommendations by November 22nd.   Will it’s recommendations affect small businesses?

The answer is most certainly yes.  Indications are it appears the expected decision by the super committee will affect businesses in a negative way in the short and medium term.

The super committee has to decide whether to recommend only spending cuts, or a combination of spending cuts and higher revenues.   Increased revenues is considered code for higher taxes.   If the super committee provides recommendations that are heavy or solely cuts,  expect steep cuts to major government programs in the next few years.     This will have to include cuts to major programs such as Social Security, Medicare, Medicaid, NASA,  and defense.    That will be true if the reason for the existence of the super committee and it’s goals are to  be met.   It will have to include cuts to many smaller programs such as farm programs, the small business administration, the department of Transportation, and others.    This will affect small businesses in many ways.

Medicare / Medicaid –   Many physicians accept Medicare and Medicaid patients.     When Medicare and Medicaid are cut, both programs will likely be forced to lower the reimbursement rate to doctors.  This will further cut into the profits of medical practices, lowering their gross receipts and profit margins.     Many physicians already may feel that they cannot run a profitable enough business.   This will result in many physicians and medical practices discontinuing to accept Medicare and Medicaid patients.  Some may totally discontinue accepting new Medicare and Medicaid patients.

Defense and NASA –  Major cuts to the defense department may occur.  if so, it will have a major affect on many businesses across the country. In addition to the large defense contractors,  there are thousands of smaller contractors that work with the larger contractors.   There are even smaller companies that contract with these smaller contractors.   Many more businesses derive their revenue simply by being located in the area of the largest contractors.    Businesses such as restaurants, gas stations and retail shops will all take a hit.  The defense department is at the top of the food chain and any changes have long tailed effects.  With a budget in the $700 billion range, a $100 billion or $200 billion dollar cut can have a major affect on the economy.

Other programs –   Other cuts by the super committee may affect the Small Business Administration, farm programs, the department of transportation, the department of education, and a long list of programs.

There is major pressure on the super committee to cut spending, and that doing so is a good thing.  There has been very little discussion of how it will affect the economy.     Long term effects of a lower budget deficit will be positive 5 to 10 years out.    However, cutting spending in the short and medium term, as outlined above, will negatively affect many businesses.    Revenues will be lower, contracts will be cut, businesses that are indirect recipients of the government programs will see lower sales as the businesses they feed off of have lower revenues.

In short, spending cuts by the super committee means less money to businesses, regardless of the issue whether the government has been overspending or not.

A –  The SBA (small business administration) may get hit with cuts along with the many other non defense programs.   Small businesses are having a very difficult time now getting loans from banks.    If the SBA loan programs are cut back in funding, businesses will have even fewer options than they had before.

B – Farm Programs –  Currently, farmers and businesses related to farming sometimes need government programs to assist them during times of droughts,  early frosts and other times of crop destruction.    Reductions in these programs will put farmers and related industries under greater pressure and more farmers may  be forced out of business.

C – The department of Transportation – New highway construction programs, highway repair, rail programs such as Amtrack, funds for building and updating shipping ports will all take a hit if the department of transportation is cut.

Small Business Loans Resources:

Thank your for visiting our Small Business Loans resource page!

 

 

Now may be the time to expand your business.

With demand ramping up and companies beginning to add jobs along with somewhat more accessible financing in the last year, now may be the time to take out a small business loan to expand your business.    Many large corporations actually have significant cash on hand but did not want to invest with the economy still with very limited expansion, and have been waiting on the sidelines.

Now many larger companies are worried that their competitors will start hiring first, and in doing so, hiring the best candidates first.   Fearing such a position, some companies have begun venturing into hiring, which will ramp up demand.

Also, some companies have begun hiring out of necessity as demand has ramped up in the face of bare bones staffing.

Small Business Loan Resources:

SBA Community Blog and Forum –  Blog and Forums by the SBA, Small business administration.   Questions can be asked and answers provided.

U.S. Department of Commerce – Helps american businesses become more innovative at home and competitive abroad.

U.S. Bureau of Economic Analysis – Provides statistics on consumer spending, corporate profits, travel and tourism and much more.

Entrepreneurworld – Resource for Entrepreneurs, including starting your own business, growing your business.

Bureau of Labor Statistics – Provides companies with up to date information on employment, demand, hiring, productivity and other information that may be useful to companies.

International Trade Administration – Creates jobs and economic growth by promotingU.S. companies abroad to governments in other countries.

More Small Business Loan resources:

Department of Labor – Provides information on many labor issues that can be useful to companies, such as insurance, regulation, wages, wage hours, compensation, safety and health

U.S. Patent and Trademark Office –U.S. office to file patents to protect a companies new or existing proprietary products.

U.S. Trade and Development Agency – Promotes U.S. Exports to Foreign Countries, please review if your company is interested in exporting goods to foreign countries.

CEO Refresher – A monthly newsletter on creative leadership ideas. Short articles, brief book reviews, models, management tools, quotations and commentary.

E-Network for CEOs – Online articles and much more for CEO’s

Public Radio Planet Money – All issues money related to the public.

Thank your for visiting our Small Business Loan resource page!

Business Credit Reporting

One advantage of incorporating right away to enhance a business’ business credit reporting which helps later when trying to obtain a small business loan, is that the time in business will show as of the original inception date in business credit reports such as Experian and Dun and Bradstreet.

Some business lenders generate auto decisions when reviewing a small business loan.  If incorrect and shorter time in business is showing on the business credit reports as part of the business credit reporting accessed by the lender,  this will be a more negative factor in the decision and can cause a lower approval, or even a decline.   Even in cases when the application is reviewed manually,  there are no guarantees  that the credit analyst will even realize, much less take the time to consider that the time in business is actually longer.

Unless a reviewer is aware of any additional facts, here isn’t any reason or motivation for a credit analyst to assume that the time in business is longer than what is showing as part of the business credit reporting.  As a result, the small business owner applying for a small business loan may be at a significant disadvantage in the small business loan process.   Contact the business credit agencies and make sure that the full time in business is being reflected.

Business credit reporting
Business credit reporting information.

 

Business Credit Reporting Resource page links:

U.S. Department of Commerce – Helps american businesses become more innovative at home and competitive abroad.

U.S. Bureau of Economic Analysis – Provides statistics on consumer spending, corporate profits, travel and tourism and much more.

Entrepreneurworld – Resource for Entrepreneurs, including starting your own business, growing your business.

Bureau of Labor Statistics – Provides companies with up to date information on employment, demand, hiring, productivity and other information that may be useful to companies.

International Trade Administration – Creates jobs and economic growth by promoting U.S. companies abroad to governments in other countries.

More Business Credit Reporting resources:

Department of Labor – Provides information on many labor issues that can be useful to companies, such as insurance, regulation, wages, wage hours, compensation, safety and health

U.S. Patent and Trademark Office – U.S. office to file patents to protect a companies new or existing proprietary products.

U.S. Trade and Development Agency – Promotes U.S. Exports to Foreign Countries, please review if your company is interested in exporting goods to foreign countries.

CEO Refresher – A monthly newsletter on creative leadership ideas. Short articles, brief book reviews, models, management tools, quotations and commentary.

E-Network for CEOs – Online articles and much more for CEO’s

Public Radio Planet Money – All issues money related to the public.

Thank you for visiting our business credit reporting resource page!

Small Business Loan Resources:

Thank your for visiting our Small Business Loan resource page!

 

Sole Proprietorship vs Corporation

Sole Proprietorship vs Corporation

Is an S corp the same as a Sole Proprietorship?
No. An S Corp is a Corporation. A Sole Proprietorship is not a Corporation.

By setting up a small business as a corporation from the beginning, the full time in business will be reflected with the secretary of state and with main business credit agencies.   Both Dun & Bradstreet and Experian business credit are major credit reporting agencies.    These reportings will later help the small business owner in their efforts to obtain a small business loan.

What is the difference between a Sole Proprietorship and a Corporation

?
A Sole Proprietorship is one indidual operating a business and are the sole owner
of that business. They are not a Corporation and do not receive the protections and other benefits that being structured as a Corporation provide.

A Corporation is a type of company structure that is more commonly used for larger companies. This type of company structure affords certain important legal protections to the owners of the Corporation. The Corporate business structure provides a strong barrier against owners being sued individually for damages.

A sole proprietorship is not listed with the secretary of state with most states.   Some states offer listing sole proprietorships under fictitious name certificate sections.     However, this is not the case with all states and even in the states which do list fictitious names, the section for finding these names is often not as prominent as the sections for corporations.    The result is when you are doing something important with your small business, such as obtaining a small business loan, setting up trade accounts, people will be looking for you.

When someone is looking for your business listing, you want them to find you

 

 

 

 

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