How changing a business name can be a disadvantage for financing

There are many reasons why a business may decide they want to change the company name.  Sometimes the reasons are due to expansion, for good reasons, and also for not so good reasons, such as solving an image problem by finding a new name.  An example of large Corporate name change for a bad reason could be Valujet.    Valujet suffered a major crash in the Florida Everglades in the late 1990’s and primarily for this reason, changed their name to Airtran.

When it comes to financing, a name change is not a good idea and should be avoided.   Even if the business can provide evidence it is the same company and only the name was changed, this explanation has always been looked at warily by lenders.   To lenders, a name change is looked at as almost a new business, or at least to a large extent, a new business, whether it is or not.

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This hurts significantly in a financing request because if a company has been in business for 7 years, and changes the name in the last 2, it will almost look to a lender like the business is 2 years old.    Another factor in how the business is looked at is what the business credit report says.   If the business credit reports have the old company name, this will hurt.  If the business credit reports have the new company name and the business start date shows the full 9 years in business, this scenario will be penalized far less severely.

One answer would be to only somewhat change the business name, if possible.   For instance, if the company name is Alley Pizza, it would be better to change to Back Alley Pizza or Alley lane Pizza rather than Jim’s World Pizza.   If the name change is wholesale, it looks like owners have changed hands.

In summary, if a business wishes to change it’s name, the owners should consider if financing is in their plans in the following 2 or 3 years, and if so, this should be factored into the decision if the name is changed, and what it is changed to.

Business Bank Statement Loan

business bank statement loan
Definition of Business Bank Statement loan:

Your business can get a business bank statement loan based on the Gross Sales of the Business.   Since almost all businesses have sales, almost all businesses pre qualify.   The funds can be used for any reason, marketing, advertising, inventory, expansion, additional employees, cash flow, new product lines, or taxes.
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For this business bank statement loan product, businesses provide their last 3 months business checking account statements and a simple one page application.   If the Gross sales figure is significant, the approved amount will often be higher.   Repayment terms for this product are 2 to 18 months.

What is a business bank statement loan?

How can my business get a loan using bank statements?

Features and Benefits:
– Only 4 to 5 Deposits per month are needed in most cases.
– No Site inspection for most clients.
– Renewals often possible once balance is 40% to 50% paid off.

What is needed for Approval?
– Most recent 3 months complete business checking account statements
– Signed and dated within last 30 days application.

What is needed for closing?
– Completed closing docs.
– Copy of driver’s license
– Copy of voided check.  Specifically, this is a copy of a voided business check.
– Other requirements may apply.

Funding amounts of up to $500,000 can be obtained through this business bank statement loan.   Up to 125% of the total dollar amount of monthly deposits can be approved.   For example, if the customer deposits $50,000 per month, a maximum of $62,500 can be approved.    Approval time is 24 to 72 hours.  In most cases, businesses are approved for 25% up to 100% of their total average deposits of the last 3 months.    As an example, if a business deposits and average of $40,000 per month, they will most often be approved between $15,000 to $40,000.

Approvals can be higher with a higher average daily business checking balance. If the customer has more than one business account, then both account statement can be provided.   2 lines may be approved.    If your business is seasonal, then the last 12 months account statements can be provided.   This will strengthen the request.

For example, a construction business is often a seasonal business with at least 2 or 3 months in the winter being low volume months.  Rather than receiving a lower approval amount due to this, simply provide the last 12 months, which will include the higher volume months.

Required to qualify or pre-qualify.
– Signed and dated application from 50% of ownership.
– Last 3 months complete business bank statements from main business operating
account.
– For amounts over $150,000:  The most recent 6 months business bank statements
and first page of the most recent business tax return.

Required for Loan Contracts:
– Valid and clear driver’s license.
– Voided business check for approved account.
– Valid E-Mail address for owners.
– Federal Tax ID number, or TIN.
– Other requirements may apply on a case by case basis. 

Other business bank statement loan customer benefits:
– Renewal options may start at 40% pay down of balance.
– No standard site inspection in most cases.
– Tax Liens < $100,000 may be accepted.
– Bankruptcies > 1 Year O.K.
– Only 50% ownership required in many cases.

A Dental practice in Lakeland Florida needed some expansion capital.   Due to the recent time in business and some past credit issues, the company wished to use their strong Gross Sales.

The company provided their most recent 3 months business checking account statements. A one page application was submitted.   Within 24 hours, they were approved for a $40,000 business bank statement loan.    They chose a repayment term and original documents were E-Mailed. The customer returned the completed documents.

A simple verbal verification was completed with the customer.   Following the verbal, the funds were wired directly into the customers account within 24 hours.    The customer had access to the funds and was able to pay a contractor to begin expansion and remodeling of a section of their practice immediately.

Features of this business bank statement loan product include:

Low credit score acceptable.   Credit scores even below 500 accepted.
No application fees or advance payment fees.
Unsecured transaction.   No collateral is required.
There are no restrictions on how the funds are used.
Fast and Easy application process.
The entire process takes approximately 5 business days.
Difficult transactions handled routinely.

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Business Bank Statement Loan
Business Bank Statement Loan

 

 

 

 

 

What are common decline reasons that you may be able to approve?
– 5 or more overdrafts or NSF’s per month.
– Less than $7,500 per month in revenues.
– Less than 2 Months in business

What are the primary factors that are looked at for this business bank statement loan?

Average daily balance.   The average daily balance is considered.  Lines begin with an average daily balance starting at $3,000.   The higher the average daily balance, the higher the approved amount will tend to be.

Number and dollar amount of Monthly deposits. A minimum average of 5 deposits per month are requested.  The higher the dollar amount of the average monthly deposit, the higher the approved amount.  Approvals are up to 125% of the average monthly deposits.

Beginning bank balances. The balance at the beginning of the month is reviewed for each of the six months.   The amount of the beginning balance is not critical.   Many businesses have some of their largest monthly expenses at the end of the month.  These include monthly business office rental payments, business mortgage payments and other payments.  After payments such as these, the beginning balance at the first of the month may be lower.

Ending bank balances – The balance at the end of the month is also reviewed.   For reasons similar to the reasons above for reviewing the beginning  bank balances, the ending balance is assessed.   Many businesses have large expenses at the end of the month, including many automatic debit payments.

Insufficient funds and overdrafts. The statements are reviewed for the total number of overdrafts and insufficient funds per month.   A company can have some insufficient funds and overdraft events per month.  The statements are reviewed to make sure that the numbers are not excessive per month.A customer wishes to obtain a higher business bank statement loan approval amount. What can they do?  Provide strong Financials.  What are strong financials?

Gross income.   Gross income figures should be increasing from any one year to the next.    This includes Profit and Loss statements.   If the Gross income figure decreases from one year to the next, this is considered a negative and will hurt the request.

Net income.   The Net income figures should be flat or increasing from year to year.   Net income figures should be $25,000 or higher.   Lenders will question the ability to repay if net income figures are too low.

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The SBA offers assistance with business plans and putting together financial statements.

Chiropractor Practice Business Loan

Alternative programs for a chiropractor practice loan almost all practices can qualify for.  Programs include loans based on either your practice’s gross sales, total deposits, practice assets, or equity in real estate.

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Chiropractor practice business loan
Chiropractor practice business loan with many term options

Loan for a chiropractic practice benefits

  1. Credit scores below 500 and as low as 400 are considered.
  2. Approvals as low as $2,600 and up to  $1,000,000 or more with no restrictions on the use of funds.
  3. Use the funding like an loc line of credit.   Your practice can borrow, repay and borrow again in many cases when there is a need.
  4. Limited paperwork.   Just a one page application and most recent (3) months bank statements.   Same day closings available.
  5. Use the funds to increase revenues of the practice such as hiring more employees, advertising, expansion, increasing office space,  and any other reason.
  6. No upfront processing fees or upfront application fees.

How to get a chiropractor practice loan

Step 1  Search for lenders that offer chiropractor practice loans.   Review program options and consider how the program can help your practice.

Step 2 Tip  Practices that have operated for more than one year can qualify for better terms.

Step 3  Review your chiropractor practice profile to the funding programs available.  Select a short list of programs that will do the most for your chiropractic practice.

chiropractor practice loan
chiropractor practice loan

Step 4  Contact the lenders to determine as best as possible whether your chiropractic practice will be approved if you apply.  Also confirm the advertised program benefits.

Chiropractor practice loan
Chiropractor practice loan

Step 5  Pick one or more programs and submit an application for financing.  Provide any documentation that strengthens your request even if it is not required.  This can include financial statements, tax returns, or other information.

Chiropractor practice loan
Chiropractor practice loan
Step 6  When you receive an offer, review all the terms and conditions.   If you are ready to close, provide all documentation required for closing.    Check if there is a right of recision period.

Frequently asked Questions:

Question: What if we need more than we are approved for?
Answer:  A second additional funding can be considered.   If the practice has the cash flow for more funding, then more funding can be approved.  A practice that qualifies for $50,000 can close the 1st transaction, then get a 2nd position  for $25,000 for a total of $75,000.
*TIP:  A second part or second transaction is often called a “2nd position”. 
Question: Our chiropractic practice does not have assets and revenues are only about $225,000 per year.  Can we get an offer?
Answer:  A practice with little assets and sales of $225,000 per year may still qualify for up to $25,000 based on the cash flow and customer profile.

What ownership percentage is required for a chiropractor practice business loan?

a minimum 50% ownership is required.    When there are 2 owners at 50% ownership, the stronger credit of the two 50% owners should be listed 1st.   the weaker credit should be the co-applicant.
If one of the owners has very weak credit then only the strong credit applicant should be on the application.

Are financials required?

Financials are not required for transactions under $250,000.   No tax returns, personal financial statements, or interim statements are requested in almost all requests under $150,000.   For requests over $250,000, the practice may want to provide financials to strengthen the chance for approval and the approval amount.

Learn how to get funding for your practice with any problems.   Apply today and get funding the same day or the next day.

Loan against equipment

Get a loan against equipment

What is a loan against equipment or loan on equipment?  Definition of loan on equipment:

The seller obtains working capital by selling their equipment and financing it back.  They keep the equipment on their property and retain ownership when it is paid off.

How to get a loan on equipment

  1. Step 1 Make a list of the free and clear equipment assets your business owns.   Include description, manufacturer, year, model numbers.
  2. Tip: Programs lend up to 40% to 60% maximum on qualifying equipment.   The equipment must be free and clear.
  3. Step 2:  Contact lenders that provide loans against equipment that match the equipment your business has.

    Contact loan against equipment companies
    Contact lenders that offer loans on equipment.
  4. Step 3:   Discuss the available program options.   Determine the programs that are the best match for your business.

    Discuss the available options
    Discuss all the program options with the representatives including terms and rates. Figure out which program is best for your business specifically.
  5. Step 4:  Apply for funding.   If approved review terms and conditions including possible site inspection requirements and other stipulations.   If you are satisfied then request closing documents and complete the paperwork.

    Loan against equipment inspection
    If you are approved then review the terms and conditions. A site inspection will be done before closing.
  6. Step 5  Complete customer closing interview and receive funds into business checking account.
    Small Business Loans Depot
    Small Business Loans Depot

    Alternative funding for businesses
    Small Business Loans Depot

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What is a loan on Equipment?
A loan against equipment allows businesses to use their equipment to get a business loan.  Borrowers can get a loan against construction equipment which is also known as yellow iron as well as tractor trailers.  Other qualifying equipment includes farm equipment and machine tools. There is also an option to combine equipment with real estate.  Only a one page application with equipment list is required.  $10000 to $250000 is available. The approval process is usually one day. The equipment stays on your property and there are also no restrictions on how the funding is used.   The debt does not show on your credit report.  Title loans on equipment are also available for all equipment with a title.
Is this a collateral loan?
It is sometimes also referred to as a loan on collateral or loan using collateral.  In these types of financing, the value of the collateral is by far the most important part of the approval or decline decision.   Many applicants contact us saying they want a collateral loan.  Programs with qualifying equipment have a high approval rate.  Many business that have this type of equipment will qualify.
How much can I get against my equipment?
You can get up to 50% to 60% against the retail value of qualifying equipment. Retail value means the value now not when the equipment was new. The equipment must be free and clear of any liens.
Does the equipment have to stay on my property?
The equipment is supposed to stay on your property. Construction equipment that has to move to different job sites can be approved to be moved to those job sites for business reasons. State this at the beginning of the application process. Business equipment that needs to be moved away from the business address needs to be approved to be moved.
Can I use cars and other vehicles?
Certain kinds of vehicles can be used. Tractor trailers and over the road vehicles can qualify. 2 or more pieces of equipment or vehicles are usually required.
How do you put a value of the equipment?
The value of the assets are determined by asset value books for each equipment or asset type. The prices of comparable equipment on sale now is also looked at to help establish values.
Do I need proof of ownership of the equipment?
Proof of purchase of the equipment or proof of ownership will be needed. This can be a paid invoice or cancelled check for proof of purchase and proof of ownership. A title can also stand for proof of ownership. Registration can also be used for proof of ownership.


This loan against equipment niche has only a 1 page application.   cnc milling machines, 18-wheelers, rigs, tractor  trailers and more types of equipment are used.   Machine tools may also bring significant working capital.

Construction equipment such as front end loaders, bobcats, skid steers, bulldozers, ditch witches, woodworking equipment, semi trucks, 18 wheelers, tractor trailers may also qualify.

Your business makes money by using equipment rather than owning it.   Get the unused cash in your equipment and use it for cash flow in your business.

loan against equipment
Get a loan against equipment.

Submit the one page loan against equipment application and also the equipment list . Decisions are usually made in 1 day.   Funding happens within five business days.   $150,000 total funding is available.

Tell us the type of loan you are looking for.   Callers ask for different types of loans.  Some ask for a loan against construction equipment.   Others ask for a loan on construction equipment or loan on equipment.   Some callers request a loan on machinery.

Underwriting looks at the age and condition of the equipment.  Complete the equipment list.  Use the most valuable and newest equipment on hand.   Older equipment may qualify.  The type and value is reviewed.  This includes trucks and tractors.   Through this loan against equipment, loans against a tractor-trailer is approved.  It is also called a loan against an 18 wheeler as well as a loan against semi-trailer truck.   Other products are a loan against big rig, or  a loan against a truck.



The lien information is usually general and the serial number of the equipment is not often listed.   Liens are release after the loan is paid off.

Representatives service the following cities in the Western Region and can be contacted.

Alaska, Hawaii and California

In Anaheim, CA and Anchorage, AK. Bakersfield, CA and also in Carlsbad, CA. Chula Vista and also Fontana, CA. Fremont, CA and in Fresno, CA. Hayward, CA and Honolulu HI.  Irvine, CA and in Madera, CA. Modesto, CA and also Merced, CA.  Oakland, CA and in Ontario, CA. Oxnard, CA and Riverside, CA. Roseville, CA and in San Francisco, CA. San Jose, CA and also San Diego, CA. Santa Ana, CA and in Santa Clara, CA. Santa Rosa, CA and Sacramento, CA. Salinas, CA and in San Bernardino, CA. In Santa Barbara, CA and also Santa Maria, CA. Sunnyvale, CA and in Stockton, CA. Thousand Oaks, CA and Vallejo, CA. Ventura, CA and also in Visalia, CA.

Representatives in the following cities may also be contacted:

Nevada, Oregon and Washington:

In Bellevue, Washington and Eugene, OR. Everett, WA and in Henderson, NV.  Kent, Washington in addition to Las Vegas, NV.  Olympia, WA and also Portland.  Reno, NV and Seattle, WA. Olympia, WA and in Paradise, NV.  Portland, OR in Renton, Washington.   Salem, OR and in Seattle, WA.  Sparks, NV as well as Spokane, WA. Tacoma, WA, Vancouver, Washington and Yakima, Washington.

Arizona and Utah:

Albuquerque, AZ and Avondale, AZ.  Chandler, AZ and in Flagstaff, AZ.  Gilbert, AZ and in Glendale, AZ.  Goodyear, AZ and also Mesa, AZ. Nogales, AZ as well as Ogden, UT.  Phoenix, AZ and in Peoria, AZ.  Provo, UT and Scottsdale, AZ. Salt Lake City, UT and also Scottsdale, AZ.  Surprise, AZ and aslo in Tempe, Arizona.  Tucson, AZ, Yuma, AZ and San Tan Valley, AZ.

Colorado, Idaho, Montana, New Mexico and Wyoming:

In Albuquerque, NM, Aurora, CO.  Boise, ID and in Cheyenne, WY.  Colorado Springs, CO as well as Denver, CO.  Helena, MT and Lakewood, CO as well as Santa Fe, NM.Consultants in the following cities can be called to schedule a same day appointment.
Kentucky, Virginia, Washington, D.C., and West Virginia: In Alexandria, VA and Arlington, VA. Chesapeake, VA and in Hampton, VA.  Huntington, WV and also in Kenner, VA and Lexington, KY. Louisville, KY as well as Lynchburg, Virginia.  Newport News, VA and in Norfolk, VA.  Petersburg, VA and also in Portsmouth, Virginia.  Richmond, VA and Roanoke, Virginia.  In Suffolk, Virginia and also Virginia Beach, VA.

North Carolina, South Carolina:

In Anderson, SC and Asheville, NC.  Cary, North Carolina and also in Chapel Hill, NC. Charleston, SC and in Charlotte, NC. Chattanooga, TN as well as Columbia, SC. Concord, NC and Davidson, TN. Dunn, NC, Durham, NC and Fayetteville, NC. Franklin, TN, Gastonia, NC. as also in Greensboro, NC. Greenville, SC,  Henderson, NC as well as Hickory, NC. High Point, NC, Kingsport, TN and Knoxville, TN.  In Maudlin, SC, Memphis, TN and also Morristown, TN. Murfreesboro, TN, Myrtle Beach, SC and Nashville, TN.  North Charleston, South Carolina as well as Raleigh, NC. Sanford, NC, Lenoir City, TN and in Shelbyville, TN. Spartanburg, SC, Wilmington, North Carolina and Winston-Salem, NC.

Florida:

In Cape Coral, FL, Clearwater, FL and Daytona Beach, FL. In Jupiter, FL, Fort Myers, FL as well as Ft. Lauderdale, FL. Hialeah, FL, Jacksonville, FL and Lakeland, FL.  Melbourne, FL, Miami, FL and Ocala, FL.  Pensacola, FL, Kissimmee, FL as well as Naples, FL. Orlando, FL, Ormond Beach, FL and also in Palatka, FL.  In Palm Bay, FL, Pensacola, FL and also Port St. Lucie, FL. Saint Petersburg, FL, Sanford, FL and Tallahassee, FL. In Tampa, FL, West Palm Beach, FL as well as Winter Haven, FL.

Alabama, Georgia, and Mississippi:

In Atlanta, GA, Augusta, GA and Birmingham, AL.  Gulfport, MS, Hoover, AL and also Huntsville, AL. Jackson, MS, Mobile, AL as well as Montgomery, AL. Savannah, GA,

Arkansas and Louisiana:

In Baton Rouge, LA and Fayetteville, AR.  Forrest City, AR,  Lafayette, LA and Little Rock, AR. Metairie, LA and New Orleans, Louisiana. Baton Rouge, Louisiana, Shreveport, Louisiana and also Lafayette, Louisiana.

Oklahoma and Texas:

In Arlington, TX and Austin, TX.  Bartlesville, OK, Beaumont, TX and in Corpus Christi, TX. Dallas, TX, Edinburg, TX and in El Paso, TX.  Ft. Worth, TX, Houston, TX as well as Killeen, TX. Lafayette, LA, Mission, TX and Muskogee, OK.  Oklahoma City, OK, McAllen, TX and also in New Braunfels, TX.  Round Rock, TX, San Antonio, TX, as well as Shawnee, OK.  Sugarland, TX, and The Woodlands, TX as well as Tulsa, OK.

Midwest Region:
Representatives in the following Midwest cities can be contacted:

Illinois, Indiana, Wisconsin:

In Anderson, IN, Carmel, IN, and Aurora, Illinois.  Chicago, Illinois, Elgin, Illinois as well as Rockford, Illinois.  Joliet, Illinois, Lee’s Summit, Missouri and in Naperville, Illinois.  Springfield,  Illinois,  Peoria, Illinois and also in Elgin, Illinois.  Waukegan, Illinois, Cicero Town, Illinois as well as Champaign, Illinois.  Bloomington, Illinois, Decatur, Illinois and Eau Claire, WI.  Fort Wayne, IN, Gary, IN and in Indianapolis, IN.  Madison, WI, Milwaukee, WI and Naperville, IL.  Green Bay, Wisconsin, Kenosha, Wisconsin, and Peoria, IL.  Racine, WI, Springfield, IL and also Waukesha, WI.

Michigan and Ohio:

In Akron, OH, Ann Arbor, MI and Canton, OH.  Cincinnati, OH, Cleveland, OH and also Columbus, OH.  Dayton, OH, Dearborn, MI and in Detroit, MI.  Flint, MI, Grand Rapids, MI as well as Marion, OH. Maysville, OH, Muskegon, MI and Parma, Ohio.  Toledo, OH, Wilmington, OH, Wyoming, MI and also  Youngstown, OH.

Kansas, Nebraska, North Dakota and South Dakota:

In Council Bluffs, NE and Kansas City, MO.  Lawrence, KS, Omaha, NE as well as Wichita, KS.

Iowa, Minnesota, and Missouri:

In Bloomington, MN and Columbia, MO. Davenport, IA, and also Des Moines, IA.  Duluth, MN and also Independence, Missouri.  Kansas City, Missouri and Minneapolis, MN. Overland Park, MO as well as Rochester, Minnesota.  Springfield, MO, St. Charles, MO as well as St. Joseph, MO.   Springfield, Missouri and St. Louis, Missouri.  St. Paul, Minnesota and St. Cloud, MN.

Northeast Region:

New York:

In Albany, NY,  Batavia, NY and Buffalo, NY.  Cheektowaga, NY, New York City, NY as well as Niagara Falls, NY.  Rochester, NY, Schenectady, NY, Seneca Falls, NY and Syracuse, NY.

Maine, Vermont, New Hampshire and Massachusetts:

In Bangor, ME and Boston, MA. Burlington, VT, Cambridge, MA and Concord, NH. Montpelier, VT, Newton, MA as well as Portland, ME.  Providence, MA and Springfield, MA. In Warwick, MA as well as Worcester, MA.

Pennsylvania, Maryland and Delaware:

In Allentown, PA and Baltimore, MD.  Bethlehem, PA, Columbia, MD and Dover, DE. Harrisburg, PA, Lancaster, PA and in Lansing, MI.  Lebanon, PA, Manchester, PA as well as New Castle, PA.  Philadelphia, PA, Pittsburgh, PA and also Reading, PA. In Salisbury, MD, Scranton, PA and Towson, MD.  In Weirton, PA, Wilmington, DE and also in York, PA.

Connecticut, New Jersey and Rhode Island:

In Bridgeport, CT and Camden, NJ.  Hartford, CT, Jersey City, NJ as well as Milford, CT.  New Haven, CT,  New London, CT and Newark, NJ.  Norwalk, CT and Norwich, CT.  Providence, RI, Stamford, CT and also in Trenton, NJ.

Visit the SBA. for more information on how assets can also be used in business loans and personal loans.

Thank you for visiting our loan against equipment 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.

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