Loading

Grow Smart Business


teaserInfographic
Close

Search Articles

Most liked posts



Recent Articles

Popular Tags

accounting and taxes blogging blogs Branding Business Development business travel Capital Access Compliance Customer Service ecommerce Email marketing entrepreneur entrepreneurship Facebook Generational Marketing GrowSmartBiz Conference Grow Smart Business lead generation LinkedIn Marketing michael dougherty mobile marketing networking online marketing Raising Capital Resources retail sales sales process SBSI Search Marketing seo small business small business accounting small business hiring small business loans small business marketing small business resources small business technology Small Business Trends social media Technology Twitter Web Design Workforce

Categories

Posts Tagged ‘small business capital’


Small Businesses Still Struggle to Obtain Access to Credit

February 7th, 2012 ::

By Karen Axelton

Nearly four years after the nation’s financial meltdown, small business owners seeking financing find themselves between a rock and a hard place. Some 90 percent of small business owners say availability of credit is still a problem for small business, reports a new poll by the American Sustainable Business Council, Main Street Alliance and Small Business Majority. The survey of more than 500 small business owners found that 60 percent of small employers have personally faced difficulties trying to obtain loans to grow their businesses.

Getting capital wasn’t always such an issue for entrepreneurs. A 61 percent majority of respondents say it’s harder for them get loans now than it was four years ago, with 29 percent saying it’s much harder. Only 9 percent of respondents say it’s gotten easier to get a loan.

What do small business owners think would help ease the credit crunch? Some 90 percent of business owners support regulatory changes that would make it simpler for community banks and credit unions to lend to small businesses. Another 77 percent support providing incentives for community banks to lend more to entrepreneurs. Specifically, by more than a 2:1 ratio, small business owners support encouraging credit unions to lend more to entrepreneurs by increasing their member lending cap from 12.25 percent of their assets to 27.5 percent of their assets.

A large majority—82 percent of respondents—also supports tighter credit card regulations, such as clearer disclosure of terms and caps on interest rates. In addition, nearly half, or 47 percent, strongly support these kinds of regulations. The survey also found that 52 percent of small business owners have used credit cards to finance their own business.

Another way small business owners think loans could be made more accessible is by reducing collateral requirements. One-fourth of those surveyed have used their homes as a source of capital for their business through a home equity line of credit. With home equity values dropping in many parts of the country, this type of collateral is no longer available to many entrepreneurs.

Finally, the majority of small business owners, or 57 percent, think that reducing the principal on underwater mortgages to the homes’ current market value would boost consumer spending, which would help small businesses regain market share. Nearly three-fourths (73 percent) said the fallout from the mortgage crisis has hurt their businesses by reducing consumer spending and demand.

The poll also asked respondents about some specific proposals put forth in President Obama’s American Jobs Act. The vast majority (69 percent) supports committing $50 billion to new and existing infrastructure projects—such as making improvements to road, bridge and water systems—that would generate new jobs and help increase consumer spending. Another 59 percent favor creating a nationwide wireless network and improving the accessibility of high-speed wireless services, which would benefit both businesses and consumers.

Read the full report here.

Image by Flickr user Rojer (Creative Commons)


 

Tags: ,
Posted in Capital Access, Raising Capital, Small Business, small business | 5 Comments »

Small Biz Resource Tip: ShirtsByMe

August 26th, 2011 ::

ShirtsByMe

Got a great idea for a T-shirt design but no money to get it to market? Crowdfunding is the hot trend of putting an idea out to “the people” and see who is willing to help you get your idea to market by chipping in some funds—investments can be as little as $5. ShirtsByMe uses the crowdfunding concept to help T-shirt artists and designers get their product to market by offering a forum for designers to promote their T-shirt designs. Just upload your design, help promote it, watch the funding come in and once you’ve reached the 50 share fulfillment requirement, ShirtsByMe will have your design printed and ready for shipment in five to seven business days. This is also a fun way to have your customers “vote” on promotional shirts for your business, bar or restaurant.

Tags: , ,
Posted in Capital Access, Marketing, Raising Capital, Resources, Small Business, small business, Social Media | No Comments »

Getting Business Credit Still Difficult for Small Businesses

July 14th, 2011 ::

 By Maria Valdez Haubrich

Small business owners’ access to capital is still being squeezed, it seems. Entrepreneurs’ ability to get credit when they need it is easing somewhat, but is still in decline compared to pre-recession levels of access to credit, according to the most recent Wells Fargo/Gallup Small Business Index survey.

In the survey, conducted in April, slightly fewer small business owners say credit is difficult to get now than in recent years. However, nearly three times as many say credit is difficult to get compared with the number who said this in 2007.

Business owners were asked, “Over the past 12 months, how easy or difficult has it been for your small business to get credit when you needed it?” In 2007, 54 percent said it was somewhat or very easy to get credit; in 2011, just 21 percent said the same. In 2007, just 11 percent said it was somewhat or very difficult to get credit; in 2011, that figure had risen to 30 percent.

On the positive side, the percentage of small businesses describing access to credit as somewhat or very difficult declined from 35 percent in the prior survey. On the down side, the percentage saying credit is somewhat or very easy to get has remained largely unchanged since mid-2009.

Gallup notes that the collapse of the U.S. housing market continues to be a major factor in small businesses’ problems accessing the credit they need. Before the recession, many small business owners used their homes and real estate to secure business loans and lines of credit. The collapse of home values, which still haven’t rebounded in most parts of the country, combined with tighter lending practices on the part of banks, has virtually wiped out many small business owners’ only source of collateral. In many cases, this is making it nearly impossible to get a business loan or line of credit. “Returning housing to price stability or better is a key to returning easier credit to the nation’s small businesses,” Gallup concludes.

How has the housing collapse affected your business’s credit-worthiness? Are you having trouble getting what you need?

Image by Flickr User Let Ideas Compete (Creative Commons)

Tags: , , ,
Posted in Capital Access, Raising Capital, Small Business, small business | 1 Comment »

Small Biz Resource Tip: Rapid Advance

June 22nd, 2011 ::

Rapid Advance

There comes a time in every entrepreneur’s life when the business could use a quick influx of working capital—whether it’s to buy additional equipment, add a new product line or fix the air conditioning unit. But there isn’t always cash on hand, especially in a still recovering economy. RapidAdvance offers a quick solution: Fill out a one-page application and RapidAdvance will tell you how much you qualify for within 24 hours. Whether you need the cash for startup or to help grow your business, RapidAdvance can help you secure the funding you need and work out flexible repayment terms.

Tags: , ,
Posted in Capital Access, Raising Capital, Resources, Small Business, small business | No Comments »

Could Business Credit Cards Gain New Protections?

June 16th, 2011 ::

By Maria Valdez Haubrich

The CARD Act, enacted in 2009, added protections for consumer credit cards against unfair or deceptive business practices. Now the Pew Health Group is urging that such protection be extended to business credit cards as well, reports CNBC.

Credit cards for business or commercial use are exempt from the CARD Act. Pew’s Safe Credit Cards Project studied credit cards issued by the 12 largest credit card issuers. These companies account for some 85 percent of the 11 million small business credit cards active in the U.S.

The study, Business Credit Cards Place U.S. Households at Risk, found that while some major banks have voluntarily become more “transparent” about their business credit card practices, the majority have not. “While consumer credit cards in general no longer include unpredictable pricing structures and hair-trigger penalty interest rates, these and other potentially harmful practices remain common on business credit cards that millions of individuals use,” the report states.

Here are some findings of the study:

  • 80 percent of business credit cards in the study had an “any time” change-in-terms clause with no right to opt out. In other words, card issuers can change the account terms at any time without notice. In comparison, with consumer cards, cardholders are typically able to opt out if terms are changed, and must be given 45 days’ notice before a change.
  • 84 percent of business credit cards allow card issuers to apply payments to lower-rate balances first, meaning charges on higher-rate balances are maximized.
  • 67 percent of business credit cards have penalty rates for going over the limit or paying late. The median annual percentage rate for penalties was 29.4 percent. The penalty rates can be applied without notice and can last indefinitely. For this to happen with consumer cards, the account must be seriously delinquent.

73 percent of business credit cards charged a late fee (in addition to the interest rate increase), and 67 percent of the cards had an overlimit fee. These fees averaged $39 each. Consumer cards have restrictions on penalty fees.

Nick Bourke, director of Pew’s Safe Credit Cards Project, is urging legislators to extend the protections of the Credit Card Act to any card where a cardholder is personally liable. If a card is not covered by the CARD Act, Pew is urging that consumers be warned of this fact.

Pew is primarily concerned with individuals who have business credit cards without being aware of the different policies. But any change to these policies would be welcome for business owners and their employees who might be harmed by onerous and unfair policies.

Image by Flickr user Shawn Rossi (Creative Commons)

Tags: , ,
Posted in Accounting and Taxes, Capital Access, Compliance, Raising Capital, Small Business, small business | 2 Comments »

New Data on Small Business Lending: Outlook Is Positive

June 14th, 2011 ::

By Karen Axelton

Small business lending showed some positive signs in new data recently released by PayNet. The Thomson Reuters/PayNet Small Business Lending Index, which measures the overall volume of small business financing, increased 17 percent in April compared to the same time a year ago, Reuters reports.

While this was a decline of about 1 percent from the prior month, this was the ninth straight month that the Index had shown a double-digit increase. Those sustained gains are a good sign that small businesses are ready to grow as soon as customer demand for their products and services increases again, said PayNet president and founder William Phelan.

“The fact that small businesses are hanging in there is a good sign for the economy” Phelan told Reuters. “The data tells us [small businesses] are having more of a pause than a major contraction.”

While economic signals have been up and down recently, overall, increased small businesses is considered positive for the economy as a whole because small companies traditionally account for the majority of new hires. The Thomson Reuters/PayNet index has proven to be an accurate predictor of GDP trends about two to five months in advance.

More good news: In separate data released by PayNet recently, fewer companies are falling behind on existing loan payments. This indicates more businesses are ready to take on new loans if needed for growth.

Accounts behind by 30 days or more (considered moderately delinquent) fell to 2.06 percent in April—a typical level before the recession. Accounts 90 days or more behind (considered severely delinquent) fell to 0.64 percent in April from 0.67 percent in March. And accounts behind 180 days or more (in other words, in default and unlikely to ever be paid) dropeed to 0.76 percent of total receivables in April, from 0.77 percent in March.

Overall, these are promising signs. In recent years, small business lending had slowed to a crawl, first by banks tightening their requirements and later by small businesses reluctant to borrow because of concerns over the economy. If small businesses are showing the confidence to take on new debt, that’s a positive thing. Are you ready to take on a loan?

Image by Flickr user Steve Snodgrass (Creative Commons)

Tags: , ,
Posted in Capital Access, Raising Capital, Small Business, small business | No Comments »

Trade Credit Eases, NACM Reports

March 8th, 2011 ::

By Karen Axelton

Positive news for businesses: Access to trade credit is easing, CFO Magazine recently reported. According to the latest monthly report by the National Association of Credit Management (NACM), trade credit access for manufacturers, in particular, is back to pre-recession levels.

In fact, the association’s report describes trade credit availability as making a “startling improvement.” The NACM’s trade credit indicator rose from 61.7 in December to 64.8 in January—reaching its highest level since January 2007.

Chris Kuehl, economic analyst at NACM, told CFO that bankers are extending more credit to suppliers, which is making it easier for them to ease credit restrictions. Manufacturers are typically more likely than service businesses to benefit at the beginning of an economic recovery because they have collateral to put up for loans, unlike many other industries.

Overall, the NACM report has other encouraging signs of growth:

  • The overall credit managers’ index score of 56.4 for January signals “more rapid expansion in the near future.” Any reading above 50 shows the economy is in growth mode. The index reached its lowest point, 39.7, in January 2009.
  • Creditors are rejecting fewer applications.
  • Fewer accounts are going to collections.

But it’s not all good news. As with many other signs of economic recovery, it may take a while for the easing of trade credit to trickle down to small business owners. In a separate report by the National Federation of Independent Business, just 5 percent of small business owners said their suppliers’ trade credit policies eased last year.

And it’s easy to see why small to midsized suppliers would be unlikely to ease credit restrictions. In an uncertain recovery, it’s still crucial for small companies with tight cash flow to vet every new customer carefully. With bank loans and lines of credit still so difficult to obtain, entrepreneurs have fewer options for recovering from the financial hit of a nonpaying customer.

Image by Flickr user Erik Soderstrom (Creative Commons)

Tags: , ,
Posted in Accounting and Taxes, Capital Access, Compliance, Small Business | No Comments »