Expert Advice for Small Business Ideas, Funding, Loan Grants, Financing Help - Biz2credit

Ben Franklin on Small Business Week, Beer, and the Facebook IPO

Chris Hurn — Mon, 28 May 2012 11:47:30 +0000

If you’ve ever wondered what I’d look like dressed up as Ben Franklin (and who hasn’t, really?), today’s your day. I’ve donned colonial-esque gear to channel one of my favorite Founding Fathers and bring you a special message as we wind down National Small Business Week.

To find out what Ben thinks about beer, the Facebook IPO, and the SBA 504 Refinance and FMLP programs (well, what I think he might think)…watch this short video…

All silliness and fun aside, I’m very serious about the need for Congress to extend the SBA 504 Refi and FMLP programs. I’m so serious about it, in fact, that I’m willing to dress up as Ben Franklin just to get your attention. If you haven’t contacted your two U.S. Senators about this issue, please do so today. And if you’re not convinced that extending these programs is necessary, I encourage you to read my Huffington Post blog and/or the testimony I presented to the Senate Committee on Small Business and Entrepreneurship.

Thanks for watching, and please leave a comment below to let me know what you think about my Ben Franklin impression.

Dedicated to Your Continued Success,

Chris

P.S. If you know someone who ought to take advantage of the SBA 504 Refi and/or FMLP programs, let me know right away. There’s a very short window of opportunity (if these programs don’t get extended), and I’d hate for a small business owner to miss out on a chance to lower their monthly payments and perhaps pull out some of the equity they have in their commercial property. Leave a comment below or email me at ChrisHurn@MercantileCC.com.

P.P.S. Happy early Memorial Day!

Learn how Mercantile Capital Corporation can help you provide your small business with a commercial property loan.

About Chris Hurn

Chris Hurn is the CEO of Mercantile Capital Corporation. MCC is a nationwide, nonbank commercial lending firm that specializes in SBA 504 loans for business owners who want to own their commercial property. It has appeared on the Inc. 500|5000 list of America’s
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Samuel Adams Launches New Program To Realize American Dream

Ramit Arora — Fri, 25 May 2012 07:22:55 +0000

Samuel Adams brewing the American Dream, is a program that partners with entrepreneurs in food and beverage industry and provides the right tools needed for growth. Jim Koch, the owner of a Boston Beer Company, announced this program. The company joined ACCION – the leading not-for-profit micro-lending organization and also a member of Biz2credit lending network.

The Boston Beer invested $250,000 and established a micro-loan fund with ACCION. Samuel Adams Brewing the American Dream – is the fund program meant to provide capital and other assistance to low and moderate income entrepreneurs. So, entrepreneurs who may not find loans from a bank now may get funded with the help of this program. The program is also into developing series of seminars to educate businesses about finance and advice businesses in the food and beverage industry.

Since the time Samuel Adams was founded in 1984, it had to face odds and the company slowly grew from bits. It identified with little guys and benefited on helping out home brewers, screenwriters, microbreweries, fiction writers, and sportscasters. The company has partnered with ACCION USA and is able to focus on small business owners and provide them the support that they need.

When corporate come up with programs that help Americans to realize their dreams and achieve goals, it does benefit Americans. Programs like the Samuel Adams Brewing the American Dream, does help entrepreneurs to rise from ashes and make it big in their career.

About Ramit Arora

Ramit Arora, Co-Founder and President of Biz2Credit, heads the company’s operations and handles larger bank and client relationships. He also oversees all strategic web initiatives for the company
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Don’t sell your gold, use it as security for a loan

Paul Aitken — Wed, 23 May 2012 09:07:49 +0000

People sometimes say to me, “If I work with borro, will I get my gold back?”

The answer is, “Yes, of course!” In just a short time, borro has built a stellar reputation in the UK and in America by providing loans of $1,000 – $1 million secured against gold and other valuable assets including luxury watches and other types of jewelry.

The questions I’m asked most frequently are:

Why do people take out loans rather than sell their gold?

Much of the gold that borro lends against is dowry or family gold that has sentimental value. People don’t want to sell it but may need cash to start a business or take advantage an opportunity that might be lost if capital is not available immediately. When you borrow against your gold, you can get it back.

What happens to my gold?

borro arranges free, secure shipping through Federal Express. The value of the gold is appraised – usually at a much higher rate that from companies that buy and sell gold. borro stores the gold in its secure vaults until the loan is repaid and is fully insured up until you receive your jewelry back when you repay your loan. Insurance is provided by Lloyds of London. It couldn’t be safer

How do I get my gold back?

Once the loan is repaid, borro arranges free shipping through Federal Express so that you get your gold back safely.

For instance, Nathan Rahulan recently borrowed nearly $60,000 to complete a property deal.

“My wife and I would never consider selling the gold, which has particular family and cultural significance. However, being able to use it as security for a loan and to draw down funds when needed is a huge benefit. In this case it provided us with an immediate solution to our funding shortfall for the new house. We can redeem the loan at any time without penalty, we have total peace of mind.”

While borro is a successful business, it also gives me great satisfaction to help people achieve their personal and professional goals. In just a few months, borro has done more than $2 million in lending in the greater New York area, primarily with members of the Indian community, who come from a tradition of gold-based lending.

Small business borrowing has taken a dip, particularly when banks are reluctant to lend to people who seek new opportunities to pursue the American Dream. Many people are looking for alternatives to banks and have found one through borro. When working with us, they do not have to worry about blemishes on their credit scores and they never have to worry about the safety of their gold until their loans are paid off and the gold is returned.

About Paul Aitken

Paul Aitken is the founder of borro.com. He has extensive senior operations, supply chain, marketing, & strategy experience in the Retail read more…

SBA’s 7(a) Loan Program And Its Structure

Ramit Arora — Sat, 19 May 2012 09:47:53 +0000

The 7(a) loan program is SBA’s primary business loan program. It is the most favored non-disaster financial assistance program. It is known for its flexibility in loan structure, availability and variety of loan proceeds.

This program has broad eligibility requirements and its credit-criteria too are flexible. As a result, what happens is wide range of financial needs get accommodated within the eligibility criteria. Business loans that SBA guarantees do not always come from the agency directly but rather flows in from banks and approved lenders.

SBA loans get funded by certain lenders like banks, private institutions and other organizations. They reach a decision to either approve or not approve loan applications after analyzing credit reports and applicant’s history. It is just that the guarantee offered by SBA reduces risk for borrowers as far as nonpayment go. Incase, the borrower defaults then the lender can obviously approach SBA for compensation. In such a case, SBA will have to pay the lender that percentage of outstanding balance.

The support provided by SBA is a guarantee that the lender can recover from losses incase the borrower cannot make repayments. SBA has to pay at-least a portion of the loan amount although it is obligated to pay the full amount. Small businesses must meet lender’s criteria and other 7(a) requirements, in-order, to qualify for SBA loans.

There has to be some sort of certification from the borrowers that there won’t be defaults. Also, lenders will have to confirm that there is SBA guarantee and they are in a position to make loans under the proposed terms and conditions.

If the SBA provides a guarantee to lenders then applicants have to be eligible and credit worthy and the loan structure should be acceptable under all conditions.

About Ramit Arora

Credit Unions Can Power Small Businesses For Further Expansion

Ramit Arora — Fri, 18 May 2012 08:51:20 +0000

Lack of credit availability is considered the main cause of financial crisis. As businesses struggled to acquire credit, it resulted in massive job loss that hasn’t yet been replaced. Small business credit availability is especially important and it accounts for half of private sector jobs. Small firms are responsible for 65 percent of new jobs during past 17 years.

Over a period of time, Congress took steps to restore credit with $400 billion from the Troubled Asset Relief Program and $30 billion as Small Business Lending Fund. The fund made available could help banks borrow at low interest rates. Then they could easily make small business loans to business owners.

The small business fund made it possible for community banks to borrow $4 billion. But in-spite of this credited amount, lending to small businesses got reduced to 1.84 percent. Reduction happened as half of the money got used up in repaying TARP debts.

However, credit unions are taking the center stage. They are asking Congress to free up small business lending and take steps in this direction. The Credit Unions’ lending to small businesses increased by 44.91 percent during the economic downturn. Bill 2231 has been introduced in House of Representatives so as to raise credit union’s lending limit from 12.25 percent to 27.5 percent. It would then be possible for credit unions to lend out more money to businesses in need.

Credit Union National Association has estimated Washington and Idaho to find $477 million in small business credit is enough for creating 5,000 jobs. There is bipartisan effort as Democrat is sponsoring the Senate bill and Republican is sponsoring the House bill. Credit Unions are an assurance of a bright future for local entrepreneurs as with their help, businesses can expand, employ more workers, create new jobs, and strengthen the economy.

About Ramit Arora

Drop Hits Loan Demand And Approval Rate In April 2012

Ramit Arora — Thu, 17 May 2012 12:24:40 +0000

The Biz2credit Small Business Lending Index based on the analysis of 1,000 loan applications found that loan approval rate dropped. Big bank lending dropped from 10.9 percent in March to 10.6 percent in April. In last March, the approval rate had been 11.6 percent. Small bank lending too fell from 47.6 percent in March to 45.9 percent in April, 2012.

Credit Union loan approvals too decreased 0.5 percent and reached 46.6 percent. This is at a time when there is thrust to increase lending to 27.5 percent of their assets. The need of alternate lenders is also minimal as the market has seen a rise in lower interest rate products.

The small business loan demand has slowed in April and has fallen down to 5.4 percent. It has slipped for the first time in a year. SBA lending activity too declined due to conclusion of the 12-month window for enhanced loan guarantees. The guarantee fee too is not waived that increases cost of loans.

As the 90 percent guarantee fee remained valid for 12 months, the lack of enhanced guarantee fees slowed down the lenders. Also, April 2012 is the first month when the guarantee has reverted to 75 percent. It is also the time when there will be an assessment of the 1-3 percent guarantee fee. So, the willingness of banks to grant funding requests dropped along with loan demand.

April 2012 also saw decline in job creation as only 15,000 new jobs actually got created. This is clear indication that the economy is slowing. European crisis and High Oil price are other factors that can be pondered upon for the decline. Capital flow is slowing down and this too is a cause of concern.

Alternative lenders include merchant cash advance lenders, accounts receivable financers, Community Development Financial Institutions (CDFI) and micro lenders. All of them are noticing a decline in loan demand.

Biz2Credit’s analysis also found that whoever applied for grants their request ranged from $25,000 to $3 million. Their average credit score remained above 680 and average time in business more than two years. The results are based on primary data submitted by 1,000 small business owners.

About Ramit Arora

Using Exit Planning Advisors

Louis Tucci — Wed, 16 May 2012 10:35:57 +0000

My investment advisor suggested that I sell my company to an ESOP. Is that a good idea?

My estate planning attorney recommended that I begin giving my business to my children. What do you think?

I’m getting tired of running my business every day. My accountant thinks a sale to a third party is a good idea. What’s your opinion?

Sales to key employees, Employee Stock Ownership Plans, transfers to children and sales to third parties can all be excellent exit strategies so questions like these should elicit an I-have-no-idea response from your advisors. How can any professional know which particular exit path is best for you?

Unless and until your advisors know more about your company and the exit goals you wish to achieve, they cannot possibly know which exit route is best. If they readily answer your questions, they may lack experience and/or a coordinated approach to helping their business-owner clients.

It is the job of the experienced Exit Planning advisor to ask you the right questions so that you decide where you are going, who is going to help you get there and the route you are going to take. Your answers help your advisors plan and implement the exit strategy that will best meet your goals.

We recommend that you begin your Exit Planning journey with two things: 1) a road map and 2) an experienced guide. If you are a regular reader of this newsletter, or have read How To Run Your Business So You Can Leave It In Style, you are familiar with the contours of the road to a successful exit. Since finding and using experienced advisors may not be as easy as reading a book or visiting a website, please feel free to call us with your Exit Planning questions.

What advisor(s) do you need?

Planning an exit is a multi-disciplinary endeavor. Protecting assets, growing value, transferring a business to children (or co-owners or employees), selling to a third party, and assuring business continuity are tasks that exceed the expertise of any one advisor. That’s why we recommend a Team of Advisors.

Who is on an Advisor Team?

An Advisor Team generally consists of the following professionals:

Financial/Insurance Professional;
Business/Estate Planning Attorney(s);
CPA; and
Business Consultant (as needed).

If a third party sale is likely, the Team will include a:

Transaction Intermediary (Business Broker or Investment Banker) and
Transaction Attorney.

Do they all have to have Exit Planning experience?

While that would be ideal, the answer is no. Not all advisors understand the Exit Planning Process, but all should be able to work with other professionals as a member of a team.

Lawyers and CPAs are expensive. Won’t this Team cost a fortune?

Assembling and consulting with your Advisor Team not only facilitates the exchange of information and ideas, but can reduce your costs by increasing the efficiency of each advisor. Instead of advisors proceeding in a disjointed manner, often repeating the work of others, you and your lead Exit Planning advisor coordinate the efforts of all advisors.

How do you find Team members?

Many business owners are familiar with many of these professionals and have worked with them individually in the past, but have not assembled them as a team charged with a common goal: helping you to leave your business in style. We can help you start to assemble your Team.

How do you get started?

Contact us. We can recommend other advisors, and can ask you the questions necessary to help you define your best exit path.

Subsequent issues of The Exit Planning Review™ provide balanced and advertising-free information about all aspects of Exit Planning. We have newsletter articles and detailed White Papers related to this and other Exit Planning topics. If you have any questions or want additional Exit Planning information, please contact us.

Louis Tucci

Louis A. Tucci is an independent financial services professional, having lead an entrepreneurial endeavor that resulted in growing a successful company to over 30 employees. Successful planned career change that started in 1997 where he has developed his Financial Services Practice to specialize in Strategic Business Planning that focuses on three main categories
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The hidden start-up costs you might have missed in business 101 — and how to pay for them

Danielle Rodabaugh — Tue, 15 May 2012 09:34:05 +0000

Starting a successful business requires much more than having an innovative idea. All too often young entrepreneurs get caught up in the prospect of establishing “the next big thing” without pausing to consider all the financial implications that come along with starting a new business. This is a huge mistake for any entrepreneur, yet so many new business owners make it. Hidden costs should be identified early on so entrepreneurs can set realistic budgets that help them target funding campaigns.

Hidden Costs

Failing to account for oft-forgotten start-up costs could keep a new business from ever having the chance to succeed. By researching and familiarizing themselves with fundamental start-up costs, entrepreneurs will be better prepared to run a successful business for the long term.

These costs are typical of most business start-ups, but they can still be easily overlooked.

market research expenses
office equipment and supplies
license, registration and permit fees
surety bond insurance
technological expenses
website maintenance
marketing and promotion

Affording the Start-Up

It’s not enough to simply be aware of hidden start-up costs; entrepreneurs then have to find ways to pay for them. Funding a new enterprise can be pricey depending on the industry and business structure. Young entrepreneurs often start their careers by developing plans for small-scale operations that won’t require a significant amount of funding. But when the aforementioned hidden costs apply to a start-up they often need help finding funding.

Investments are crucial funding sources for most start-ups. After developing a budget based on realistic overhead costs, entrepreneurs should approach industry moguls who would be interested in the product or service the enterprise will provide. If possible, they should try to gather enough funding to support business costs for the first two years. Gaining investments helps entrepreneurs develop networking and sales skills, which are two characteristics that all business owners should possess.

Grants are available from certain government agencies. To be issued a grant, a business must meet certain qualifications. To qualify for a grant, entrepreneurs must file an application with a government agency such as the Small Business Administration or the Minority Business Development Agency. Applicants looking to obtain a grant typically have to provide a detailed business plan that outlines their goals for the enterprise accompanied by how they plan to achieve them.

Loans from financial institutions are also important funding sources that entrepreneurs take advantage of. Although the idea of repaying loans with interest might seem unappealing to some entrepreneurs, it might be necessary to ensure adequate funding. If possible entrepreneurs should start out with small bank loans. Fortunately, paying them off can help build an entrepreneur’s credit score and professional reputation. If done right, borrowing can be a manageable way to cover start-up costs.

Patience is crucial.

At the offset, entrepreneurs invest in a number of start-up costs without gaining any return. For a time, expenses will exceed income. As such, this last tip is applicable to most business situations: patience is key. Entrepreneurs should realize that that a company’s ability earn to revenue will take some time. However, entrepreneurs who allocate funding appropriately by preparing for hidden costs can see their hard work and planning pay off.

About Danielle Rodabaugh

This article was submitted by Jessica LeMay who is a principal at
SuretyBonds.com, a nationwide surety producer that..read more…

Video of My Recent Senate Testimony

Chris Hurn — Mon, 14 May 2012 11:10:17 +0000

It took a little longer than expected, but we finally have the video of my testimony before the Senate Committee on Small Business and Entrepreneurship on March 29th. Believe it or not, I’ve taken a lot of heat for what I said at this Senate Hearing two weeks ago. Some of my comments have been taken out of context, and some folks have fabricated things I never said (or even implied). So, before I’m bombarded with any more criticism for what I said (or didn’t say), I invite you to watch the video for yourself and see what really happened:

As I mentioned in my last blog post, since I was given a very short window to deliver my testimony verbally, I submitted a written testimony that gives greater detail about the recommendations I made to the Senate Committee. If you have questions or concerns about anything I said in the video, or if you just like to have ALL the details (and then some), you can read my full written testimony here.

Also, if you’re a glutton for punishment and would like to watch the FULL Senate Hearing (it’s just under two hours), you can do that here.

So…now that you’ve heard my verbal testimony (for the second time, if you saw it live) and had the chance to read my full written testimony, what do you think about my recommendations for the Senate Committee and the 504 industry? Let me know by leaving a comment below or emailing me at ChrisHurn@MercantileCC.com. And thanks for hearing me out. As you can probably see (and read), I want nothing more than to strengthen and stabilize the SBA 504 loan program so we (and others) can continue using it to help America’s small businesses build wealth. I believe there hasn’t been a better tool to do this, and small businesses deserve this advocacy.

Chris

P.S. In case you haven’t heard, we’re having a record year so far. What does that mean for you and other small business owners? It IS POSSIBLE to get financing for owner-occupied commercial real estate projects! I know that lending hasn’t picked up drastically in all parts of the economy, but we’re helping more small business owners every day. If you or someone you know is interested in owning their commercial property, call me at 1-866-622-4504 or email me at ChrisHurn@MercantileCC.com TODAY!

Find out more about Chris and Mercantile Capital Corporation by visiting the SBA 504 Experts.

About Chris Hurn

Goldman Sachs 10,000 Small Businesses Program Reaches Cleveland

Ramit Arora — Fri, 11 May 2012 08:37:18 +0000

Goldman Sachs, the New York investment powerhouse, has plans to invest $15 million in Cleveland-area small businesses over the span of next five years. The move is going to help add jobs, increase revenue earnings, and make Goldman Sachs more business savvy.

Cleveland is going to become the seventh city for “10,000 Small Businesses” program jointly launched by Goldman Sachs and the Goldman Sachs Foundation. The program launched two years ago has so far rolled out in six cities. There will be an official announcement about this plan from the Cleveland Mayor Frank Jackson.

The region that would be receiving $15 million can use the fund to help established businesses further grow. The money is not really meant for limping businesses but is meant for the ones that can excel. Goldman Sachs will be working in association with Cuyahoga Community College as well as local community and small business organizations. Small business owners can apply for grants as well as loans.

Greater Cleveland has opportunity to grow as there are 51,000 small businesses with fewer than 100 employees. It is something very exciting for Goldman Sachs to find so many small businesses in one community. Goldman Sachs is taking up communities one by one that used to be great industrial capitals in the past. It is targeting areas with notable workforce and regions where the program can make the biggest impact felt. The goal is to create more successful businesses.

The Goldman Sachs program is aimed at reaching 10,000 small businesses nationwide. Currently, it is operational in places like Chicago, Long Beach, Los Angeles, New York, New Orleans and Houston. Cleveland is going to become the seventh region and the program will further continue to expand in other cities of U.S.

So, it is great opportunity for Cleveland businesses to make their best and realize their entrepreneurship goals. The program will definitely help to create jobs and further the growth of small businesses in America.

Northeast Ohio Hispanic Chamber of Commerce, Council of Smaller Enterprises, JumpStart Inc., and the Urban League of Greater Cleveland are partners of the Goldman Sachs program.

About Ramit Arora