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3rd Quarter import prices up 1.5% third quarter

3rd Quarter import prices up 1.5% in the third quarter of 2012, per the bureau of labor statistics, after falling 3.8% in the second quarter of the year.

The bureau further reported that the increase was led by an 8.2% increase in fuel prices that offset a .4% drop on prices for non fuel imports.

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Bureau of Labor Statistics, export corn prices up 32.5%

According to the Bureau of Labor Statistics, export corn prices up 32.5% from June to August 2012.  Prices kept increasing as drought conditions kept worsening.

The bureau reported that beginning stocks were already low at the end of 2011, thus exacerbating the problem.

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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.

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Do deficits matter to the U.S. Economy?

Do deficits matter and will they harm the U.S. Economy in the long term?

It was widely reported in the past that former Vice President Dick Cheney said that deficits do not matter.    In general, the dollar amount and the number of years they keep happening will dictate how much they matter and the impact on the U.S. Economy.    

Saying they do not matter is only correct when they are very small, and for only one or two years.

That has not been the case for decades.

Large deficits for many years matter a great deal.   Currently, the government is using approximately 10% of revenues to simply pay interest on the current national debt.     This means that only 90% of the funds taken in can be spent.   Each additional year the Government runs a large deficit, that 90% goes down. Most State laws require the State to balance the budget every year.

So deficits do matter.  Based on federal budgets since 1980, a balanced budget amendment is the only solution to the problem that will work in practice. All of the other options are debated but they do not work because they are aspirational and later forgotten and ignored.

The notion that a stimulus will create enough revenues to repay the borrowed money has not happened. In fact, in the rare cases when there was a surplus, the government quickly legislated a massive tax cut, again largely responsible for immediate deficits.

Large shortfalls in revenue compared to spending over time creates a debt that eventually begins to starve available cash.

The borrower at some point has to make a fundamental decision that will make or break their long term financial future.

Stop borrowing and have a sustainable future or borrow into bankruptcy. The government’s share of interest on debt becomes so large they must borrow more to spend the same amount of money on programs. International and domestic lenders become alarmed at the ability of the borrower to repay and require higher rates of return. This exasperates the debt and need for more money. The debt then increases faster.

Eventually, there need to be large tax increases or large spending increases. This comes at a very bad time in which Social Security and Medicare shortfalls will also have to be corrected. Those shortfalls haven’t even been taken into account yet and have been ignored for a future crisis.

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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!

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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.

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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 Resource page links:

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.

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.

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!

 

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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.

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Or Call us at Tel:  1-919-771-4177, or Send E-Mail

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. 

Thank you for visiting our Sole Proprietorship vs. Corporation page

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