Federal Business Loans
Audits Put Extra Polish on Loan, Credit Applications
The credit and loan market continues to be tight, and any small advantage could put your business ahead in a review. As the Wall Street Journal reports, an audit performed by an external certified public accountant, as opposed to the IRS, could be that advantage. Many businesses are turned away by the perceived time, effort and cost of an audit, but the benefits could offset those concerns. Based on data from more than 10,000 closely held companies—about half of which have less than 500 employees—a study by the University of Chicago Booth School of Business found audited businesses save an average of $6,900 for every $1 million. Read More.
Federal and State Regulators Encourage Small Business Lending
A group of federal financial regulators and the Conference of State Bank Supervisors issued a statement last week to encourage small business lending . The agencies recognize the recent stymied flow of lending, and the broader economic effect caused by small businesses with no credit access. The statement may encourage small business owners, who are currently not optimistic about the future of lending. The regulators attempted to ease reluctance by stating that they will make no supervisory criticism on the basis of a review of financial condition, should the lender be able to prove the process comprehensive. Regulators also urged lenders to consider each application on an individual. Read More.
Obama Proposes New $30 Billion Community Lending Initiative for Small Businesses
In a follow-up to his State of the Union address last week, President Obama outlined his plan yesterday to use $30 billion of the remaining Troubled Asset Relief Program (TARP) funds to create a new government lending program designed to boost small business lending by community banks. As reported by CNNMoney.com : The first draft of Obama’s plan, announced three months ago, involved lending TARP money to community banks to use for local business loans. But community bankers reacted warily to the plan — they had little interest in taking capital from a program that has drawn so much criticism. …. Read More.
Obama Proposes New $30 Billion Community Lending Initiative for Small Businesses
In a follow-up to his State of the Union address last week, President Obama outlined his plan yesterday to use $30 billion of the remaining Troubled Asset Relief Program (TARP) funds to create a new government lending program designed to boost small business lending by community banks. As reported by CNNMoney.com : The first draft of Obama’s plan, announced three months ago, involved lending TARP money to community banks to use for local business loans. But community bankers reacted warily to the plan — they had little interest in taking capital from a program that has drawn so much criticism. …. Read More.
Some Small Businesses Turning to Asset-Based Lending
As reported today in The Wall Street Journal , the lack of access to traditional small business loans and available investors has found a growing number of small business owners considering asset-based lending options: Asset-based lending, once considered a last-resort finance option, has become a popular choice for companies that don’t have the credit ratings, track record or patience to pursue more traditional capital sources. Because asset-based lenders focus on collateral, rather than credit-worthiness, they do deals that more traditional lenders shy away from. Borrowers put up equipment, inventory, accounts-receivable and other liquid assets in exchange for the money. Drawbacks include relatively high rates, and the ability of lenders to legally seize assets if the. Read More.
SBA Lending on Rebound; Doubles in Q4 2009
Small Business Administration (SBA) lending , which was on unsure ground last year, is making a strong rebound. In Q4 of 2009, the SBA processed 12,393 loans (a 37 percent increase over 2008), totaling $3.8 billion (double the amount from Q4 2008). CNN Money reports on the effects this growth might have going into 2010. “The big takeaway that we have when we look at this is that we were successful in turning around the SBA lending,” SBA spokesman Jonathan Swain said. A lagged recovery: SBA loans represent a tiny portion of the overall small business lending landscape, but they’re an important barometer of banks’ willingness to. Read More.