Small Businesses Need You: Shop Small Biz Saturday

If you follow me on Twitter (@KarleneSinRob) or other social media sites, you might have seen some of my posts asking you to support small businesses.  Saturday, November 24, 2012 has been designated as “Small Business Saturday”. Supporting this effort are companies such as: American Express, Constant Contact, FedEx, Delta Air Line, to name a few. Advocacy groups supporting this drive include the National Restaurant Association, Association of Women’s Business Centers, SCORE, Latino Economic Development Center and many more.

This day, like “Black Friday” or “Cyber Monday”, is crucial to many of these entities’ survival.They also need customers buying their goods and services to boost their year-end profit margins. We can help them by making the extra effort to spend our money at these local area businesses. Many of them have products or services that could benefit you that compare favorably to larger retail stores or service providers.

Why is this important?

This is important both for getting our economy back on track and because small businesses could use the revenue boost. Supporting small businesses is a must.They employ a large segment of our working population nationwide. Supporting these businesses will help to build small and large communities alike. If you are a big support of “Made in America (or USA)” products, you are more likely to find such items through these businesses. They are as diverse in their products and services as the country is in relation to the uniqueness of our population.Let us give back by shopping “Small Business Saturday”!

Furthermore, spending your hard-earned dollars at these local businesses could benefit you in unforeseen ways. Successful local businesses hire locally, improving the local economy.  They also foster neighborhood pride and money spent at local businesses tends to stay local and support the community through investment in goods and services and taxes.

How you can help

Tell your family and friends. Send out emails and post to all your social media sites. Post flyers in your community. Just tell everyone you meet. You can get additional information online via http://www.ShopSmall.com.

So, get out and do your part in helping small businesses!

Potential Collateral Options for Your Business Loan

By Karlene Sinclair-Robinson

Financing your business growth or survival is vital. IF you can get the money you need, good for you. Many business owners end up using collateral they did not plan on pledging. Some end up being denied due to insufficient collateral.  Make sure this does not happen to you!

Many banks or alternative funders require a variety of collateral depending on the loan amount and the type of loan you are seeking. Each financing source relies on their approved collateral types to make a given loan.

Types of Collateral

1. House – your house will always be a prime piece of collateral. It is the best source to use for many business owners. The lender will multiple the current value of your property with a given percent, e.g.: 75% and then subtract the outstanding mortgage amount. This formula determines the maximum amount the lender is willing to approve. For some financing option, this collateral is not a good fit.
2. Vehicle – banking sources, in most instances, will not accept this as acceptable collateral.
3. IRAs – Individual Retirement Accounts are not acceptable collateral for banks. Instead, depending on the type of account, this collateral could be used with non-traditional financing sources. Be sure to check with a qualified source.
4. CDs – Certificates of Deposit are always a qualified collateral type. This is cash that can be accessed according to the terms set forth in the CD.
5. Stocks – are considered applicable types but check with your lender. They might or might not accept the stocks you present. Their valuation of the stocks will be assessed between 50% – 90%.
6. Accounts Receivable – are often acceptable but must be assessed by the financing source. This is based on a number of factors. For example, some financing sources will not accept medical or construction receivables, so if your company operates within these industries, your receivables might not be approved.
7. Equipment – is used based on type. Heavy duty equipment is acceptable based on the collateral’s depreciated value multiplied by a given percent, e.g.: 50%.  Of course, any equipment with debt against it will not be accepted.
8. Inventory – is not normally not an acceptable collateral, especially perishable items. Depending on the financing source and the inventory type, a business owner just might be able to use this to their benefit.
9. Jewelry – is not an acceptable collateral type.

Knowing what collateral a source will accept is important. Understanding your financing source is also critical. What a bank will require will not necessarily be the same as what a non-traditional funder, such as a micro-lender or a factoring source, will accept. Be prepared by understanding what they are looking for when compared to what you own.

The # 1 Question Borrowers Must Ask

By Karlene Sinclair-Robinson

When you decide to seek the financial assistance necessary to survive in today’s economic climate, you may find yourself against a wall. It could seem to the entrepreneur that the lender or investor is requiring every document under the sun.  There are so many required documents: the Personal Financial Statement, Profit and Loss sheet, Balance Sheet, Cash Flow statement, Business Plan, and much more. There is the first round of paperwork, then the second round, and maybe even a third round of documents requested.

The question the business owner must now ask is this, “Is this enough to get the loan?” When they opt for a traditional bank loan, the bank’s first priority is a credit analysis. Once you pass this analysis, all other applicable documentation must be presented before the lender will make a final decision.

Here is probably the most important question to ask. Think long and hard before you answer.  Before you ask yourself the question below, close your eyes; think on your current financial position, both business and personal.  In your mind’s eyes, cover all the areas of your financial situation. Okay, if you have covered all areas, now ask yourself this question:

WOULD YOU LEND TO YOU?

Seriously consider this question before you respond to it. Be sure to answer it honestly. Now, would you lend to you? Do you fit the type and amount of financing you are seeking if you were the lender? Do you fit the character of a good borrower?

If you answered “Yes”, then you should have no problems presenting to any lender what they require.  You should be able to get all or most of the money you need, if you answered this question honestly.

The sobering reality is many of you will not pass this test. You know your own situation and wanting to borrow against your current financial position is not necessarily the right thing to do. If you have a bad taste in your mouth after reading this, then you know you are not a good candidate for “Other People’s Money” (OPM).

Now that you have had the opportunity to consider this question, please keep it in mind the next time you decide to borrow. It is important to consider things from other people’s point of view. Lenders are in the business of lending. If they do not make loans, then they will be just like businesses that have had to close their doors.

Mid-Sized Banks Split From Wall Street in D.C. Lobbying

By Carter Dougherty and Cheyenne Hopkins - Nov 2, 2012 10:13 AM ET

Mid-sized banks that mostly let Wall Street and small firms speak for the industry during the debate over the Dodd-Frank Act have decided it’s time to carve out their own agenda in Washington.

Companies including U.S. Bancorp. (USB), SunTrust Banks Inc. (STI), PNC Financial Services Group Inc. (PNC) and Regions Financial Corp. (RF) are opening their own lobbying shops and staffing them with seasoned Washington hands. Regulators and lawmakers have begun to pay attention as the banks argue for changes in how they’re affected by Dodd-Frank rules including the so-called Volcker ban on proprietary trading and procedures for unwinding failed banks.

Executives and lobbyists for regional banks say they should be treated differently by agencies implementing the new regulations, because they focus on traditional deposits and lending rather than the higher-risk activities of firms such as JPMorgan Chase & Co. (JPM) and Goldman Sachs Group Inc. (GS)

“We are not Wall Street banks but we face the same regulatory regime as a Wall Street bank,” said Mark Oesterle, a lobbyist for SunTrust who formerly served as an aide to Senator Richard Shelby of Alabama, the top Republican on the Senate Banking Committee.

Regional banks tend to have more than $50 billion in assets, mostly in commercial and retail loans rather than complex investment banking products. Their size is well short of a Wells Fargo & Co. (WFC), which is 20 times larger with assets of more than $1 trillion. Most have a distinct geographical footprint, like Regions in the South. There are about a dozen such firms in the U.S. who have become active in Washington.

 

Lobby Expenses

Atlanta-based SunTrust spent less than $5,000 on lobbying in 2011 and 2010, according to federal records. So far in 2012, the bank has reported spending $75,000.

Other banks are opening their checkbooks even wider. PNC, based in Pittsburgh, reported spending $570,000 in 2010, $1.53 million in 2011 and $750,000 so far this year, records show. Regions, of Birmingham, Alabama, spent $540,000 in 2010, $1 million last year and $890,000 so far in 2012.

Cincinnati, Ohio-based Fifth Third Bancorp. (FITB), which spent $145,000 in 2010 and $680,000 so far this year, hired Eric Rizzo, a former congressional aide and insurance industry lobbyist, to open a Washington office in June 2011.

“We needed to beef up, to have that day-to-day presence in Washington,” Tom Ruebel, the bank’s Columbus, Ohio-based director of government affairs. “It’s not just Dodd-Frank implementation but a long-term investment for us.”

Read More: Source...  http://www.bloomberg.com/news/2012-11-02/mid-sized-banks-split-from-wall-street-in-d-c-lobbying.html