Before you can achieve better purchasing power you need to know all the information that appears on your report. This includes everything from current and historical borrowing data to payment habits. After obtaining this information, you can determine if your habits or inaccurate information are hindering your purchasing power. These steps need to be taken before making a significant purchase or applying for any type of credit.

Tips for optimizing your credit report

• Never exceed, approximately, 45% of you allowable credit.  Credit cards are getting near their maximum allowable limit isn’t a good sign to inquirers.
• Multiple credit inquiries are unfavorable. Try to keep this number below five-to-six per year, and have them not all grouped together.
• Find the source. Whenever you are turned down for credit, the proposed credit provider must give you the source of the information that caused the refusal.  This allows you to get your report from whatever agency they used (free for a period of 60 days from their decision).
• Remember: all information including late payments, collections, bankruptcy, foreclosures, etc. are kept on the report for seven-to-ten years.

So you think you have excellent credit?
It pays to check periodically to determine if any information in which you may not be aware of has negatively affected your score.  Errors and discrepancies frequently appear and would be unknown to you if you have not developed a habit of periodically checking with the bureaus. By following this procedure it will allow time for you to correct or fix these problems prior to attempting to get financing.

Check your personal credit report at least once a year. Carefully review your reports to ensure all the information shown on your credit report actually belongs to you and that the balances are current and correct. There are three major credit bureaus to be should be concerned with.  Contact each credit bureau directly online.  Each of these have a small cost associated with the report:

• www.equifax.com
• www.Experian.com
• www.transunion.com

Also check out these two:

• http://www.annualcreditreport.com is a free site allowing you to get one report from each bureau annually. These reports do not contain your credit score, but for a small fee (usually under $20) the score can be obtained.
• Another good site is www.myfico.com.  They also have a small fee.

Be cautious and stay with the above choices.
There are untold numbers of sites that advertise the availability of your credit report and score and are quite often shown as being free. Be cautious of all these since you must supply your Social Security number and do not know their security level. Additionally, many will automatically sign you up for a monthly fee for a variety of services.

Have discrepancies? 
If you find any errors or discrepancies on your report, notify the credit bureau immediately. They are required to make a full investigation.  If the information cannot be verified in writing, within a short period of time, it must be removed from the report.

Before looking at the considerations, you need to know that every lender and/or investor has specific requirements for an applicant to meet. You’ll have the highest degree of success by pursuing financing from sources whose requirements you best meet. It is important that you fully understand the requirements of the particular lender before proceeding. Common financing requirements include: personal credit requirements, specific financial ratio tests, personal capital injections, ability to repay and possible collateral requirements.

Top 5 financing considerations:

1. Choosing between financing methods:

• Repayment terms
• Total cost
• Requirements of the lender or investor

2. Most Common Options

• Debt financing is basically borrowing money with the obligation of repaying the lender.
• Equity or investment financing may or may not require cash repayment, but does include surrendering a percentage of the business to the investor. This percentage, very often, can exceed 50% and includes the expectation for you to buy this back at a premium price. You must be prepared for this type of investor to possibly assert a great deal of influence on managerial and strategic decisions.
• Selling shares of stock to finance a business has its own set of vital considerations, including the possibility of losing managerial control in the future and falling victim to a takeover from a larger company.

3. Length of arrangement:

• Long term loans can build up a significant amount of interest.
• Shorter term loans will require larger periodic payments.
• Consider the frequency and payment amount – can you meet it?
• How is principal and interest allocated? The higher the allocation of funds to principal, the lower the total long-term cost of the loan will be.

4. Associated Costs: Add up all the costs with each financing method. Do this before making a decision to ensure you OK with the final cost. The most common costs for loans include interest rates, origination fees, closing costs and possible brokers’ fees.

5. Prepay obligations: Perhaps you’d like the ability to prepay your loan obligation prior to its final date. It is common for debt financing loans to allow prepayment, but you need to know if there are penalties. Try negotiating to eliminate, or at least, reduce these penalties to a minimum. One major advantage of a SBA guaranteed loan is that there aren’t prepayment penalties involved in loans that don’t exceed 15 years. By considering this allows you to seek longer repayment terms, which can greatly lower the required payment.

Still have questions? Consider attending the SBDC’s comprehensive Financing in Today’s Economy course. You can also make a no-cost, consulting appointment with one of our finance experts (although, we do recommend you take the course first so you can prepare targeted questions).

What are the most common resolutions?  Our research shows the top New Year’s resolutions include:

• Learning something new
• Getting organized
• Getting in shape
• Getting out of debt
• Spending more time with family or enjoying life
• Stop smoking

Learning something new

SBDC provides numerous classes every month to help you learn something new about owning and running a new business.  We also have classes to support you in growing your existing business. In 2012, we are adding several new classes like Ignite Your Online Marketing: A Guide to 4 Essential Google Tools and Financial Intelligence: Understanding and Analyzing Financial Statements.  We are also implementing technology to allow clients at our satellite offices to attend classes via the web.  There is always something new to learn when it comes to managing a business.  SBDC is here to help you learn in 2012.  Sign up for one of the SBDC’s low cost classes now: http://www.sbdctampabay.com/training

Getting organized

“Business don’t plan to fail, they fail to plan.”  Getting organized is at the core of planning.  Do you need to create a budget for 2012?  Is it time to update or create a business plan?  Does your marketing need a boost with the help of a marketing plan?  Are you thinking about taking your business global, but don’t know where to start?  Could doing business with the government (state, local or federal) improve your profits? SBDC’s consultants are experienced and ready to assist you with your plans for marketing, finances, financing, global trading, government contracting and more.  Call our consultant coordinators (813-905-5800) to be matched with the best consultant to support your needs.

Getting in shape

Losing the fat, unneeded expenditures eating up your profit, is a challenging resolution.  SBDC consultants can help you review your business with a fine toothed comb and find the areas to cut.  We have two CPAs on our staff to assist you in locating opportunities to cut taxes.  Now is the time to plan for a smaller tax bill in 2013.  We can also help you build the muscles necessary to support a strong healthy business.  Once we help your business get in shape, we are here to help you stay in shape.

Getting out of debt

A stronger, healthier, organized business will have the funds necessary to reduce business debt.  Maybe you need to reorganize or restructure your debt before you are in a position to reduce it.  SBDC financing specialists will give you a good assessment of your best options.

Spending more time with family and friends or enjoying life

Do you run your business or does your business run you?  If you have been letting your business run you, changing the tide  may be your 2012 resolution.  At the SBDC, we believe the best way to enjoy life and time with family and friends is to have a smoothly run business. We will consult with you to set up the plans and systems to reach your goals and create a balanced life.

Stop smoking

Okay, so we can’t help you with this one.  But our office is a smoke free zone and we will encourage you all we can.

Don’t let the economic challenges of 2012 stop you from making or keeping your business New Year’s resolutions.  The SBDC has what you need to make them happen.  Call us today for an appointment or go online and register for a class.  Get the year started in the right direction with assistance from the SBDC.

In Ray Linder’s book, “What Will I Do With My Money?,” he narrows the 16 Myers-Briggs Typing Instrument (MBTI) personality types to four Money Per$onalities: protectors, planners, pleasers and players. All four of these types can be successful in business but it’s important to understand your needs, values and motivations when it comes to money.

Protectors seek security and protection. Planners seek financial gain.  Pleasers desire emotional satisfaction and/or avoidance of loss. Players want comfort and convenience since they tend to be free-spirits focused on having the freedom to do what feels good.

When comparing these personalities with maintaining accounting systems, the trend reveals that protectors realize the importance of proper bookkeeping.  Planners like to spend time on budgets and looking to future profits.  Pleasers ignore accounting until someone gets emotional about it, and players can ignore it until the IRS shows up.

So, how can knowing these things help you? They will allow you to develop strategy that matches your personality.

Taking a Deeper Look

Protectors are the most responsible of the personalities because they focus on preserving a comfortable and secure environment. If you are a protector, be aware of your need to be economical, structured, conservative and cautious.   This could prevent you from taking a calculated risk to grow your business. You may want to create a business management team that helps you look to the future and not be encumbered by the past.

Planners look to the future. They challenge themselves to acquire expertise and pursue personal excellence. As a planner with a focus on the future and problem solving, you may want to assemble a team that keeps you grounded in the present so you use your money for your business’ current needs rather than risking too much on where you want it to be in the future.

Spontaneous, impulsive, and risk-taking with money and life, as a player you are centered on the here and now, spending your business capital on what brings immediate reward.  Create a management team that will help you see the big picture. Balance your money decisions to meet all your needs, not just those right in front of you.

Pleasers are the most empathetic of the Money Per$onality types. They want to cultivate relationships and help others, typically ignoring money matters.  Being a Pleaser you need to create systems that don’t require you to get involved intimately with your money.  You will want to create relationships with your money people (bankers, accountants and financial planners) that will give you the support and guidance you won’t seek on your own.

If you’d like support in navigating the money road, contact the SBDC location nearest you. We can help. Our consultants will put you on the right path whether you’re starting or growing your business.

This means that small business owners holding commercial real estate loans — for the purpose of housing their business — containing unfavorable terms or interest rates now have the opportunity to refinance. At first, the program was only open to businesses facing a commercial mortgage or balloon payment due before December 31, 2012. Now, the SBA lessened program constrains by including businesses with later payment dates and those that can show a substantial improvement in cash flow.

New Temporary 504 Refinancing Program Overview:

• Applicant must demonstrate that they are current on existing payments and have been so for the past year.  A new, independent appraisal of the property is also required.
• Business owner may refinance 90 percent of the current appraised value or 100 percent of the outstanding mortgage, whichever is lower. Loan proceeds can’t be used toward other business expenses and government-guaranteed loans aren’t eligible.
• Program is designed to facilitate the acquisition of fixed assets for small businesses — primarily real estate and heavy equipment. These loans are issued for a period of up to 20 years and carry a below-market, fixed-rate interest.
• Unlike the permanent 504 program, the expansion component isn’t permitted.

Visit the SBA’s fact page to learn more about the 504 temporary program.  The 504 permanent loan program focuses on assisting small business owners purchase business occupied property (this could be an existing building or the desire to build a new structure). The permanent program offers the opportunity to have a small down payment and extremely competitive interest rates and terms.

To speak with a finance expert about the 504 programs or small business financing, contact the SBDC’s regional office at 813.905.5800.  The SBDC also provides low-cost seminars in the areas of financing a business, SBA loans, small business taxes, credit strategies, QuickBooks and Bookkeeping.  Check out our courses by browsing all course descriptions or browsing course schedules at your nearest SBDC.

From Jan. through May 2011, 160 business loans were guaranteed by the Small Business Administration in the Tampa Bay area. Here are the most active SBA 7(a) lenders in the Tampa Bay area over the last five months:

LENDER,  # LOANS

Wells Fargo Bank , 9

JPMorgan Chase Bank , 8

Borrego Springs Bank , 8

SunTrust Bank , 7

Synovus Bank , 7

Fifth Third Bank  , 6

Regions Bank  , 6

Remember, the consultants with the Florida Small Business Development Center at the University of South Florida can help you prepare your loan proposal and direct you to lenders who will seriously consider your request because they still want to make loans. For an appointment, contact one of our offices or register for a Understanding SBA Stimulus Loans workshop.

Of 44 financial institutions that have made SBA 7a guaranteed loans in the past four months, five have closed more than 10. The Average loan amount is $494,000, however, amounts dipped as low as $5,000 and jumped to highs of $5 million.

Top 5 Bay Area SBA Lenders:

1. Superior Financial Group- 22 loans

2. Regions Bank- 15 loans

3. SunTrust Bank- 13 loans

4. Columbus Bank & Trust – 12 loans

5. JP Morgan Chase Bank- 11 loans

Eligible Use of SBA loan proceeds include but are not limited to the following:

• Purchasing an existing business
• Purchasing land or buildings to cover new construction as well as expansion or conversion of existing facilities
• Purchasing equipment, machinery, furniture, fixtures, supplies or materials
• Long-term working capital, including the payment of accounts payable and/or the purchase of inventory
• Short-term working capital needs, including seasonal financing, contract performance, construction financing and export production
• Financing against existing inventory and receivable under special conditions
• The refinancing of existing business indebtedness that is not already structured with reasonable terms and conditions

If you are looking for the money to grow or start your business, or need assistance with the process, contact your local Small Business Development Center office for free information, free one-one counseling and training as well as low-cost seminars.  SBDC certified business analysts can assist you in finding the financial institutions in your area which focus on lending to your type of business situation.

Yet, Hope Prevails…
With federal funding still supporting the SBDC, the center can continue to offer assistance to aspiring entrepreneurs and seasoned businesses alike in this time of uncertainty. If anything, the recession has given many business owners a jolt to re-examine their business policies, finances, and competitive arenas. Jim Parrish points out that, with a little assistance and strategy, opportunities still sprout from the mayhem and confusion. “We help our clients attempt to navigate that maze. Some of our clients are technology-based, which tend to be more attractive in the equity markets.

See the full article at The St. Pete Times Online .

Mr. Jim Parrish is a Certified Business Analyst with the Small Business Development Center at USF. He has more than 30 years of extensive experience as a bank manager, small business loan officer, financial counselor, and instructor. He has had direct responsibilities in the areas of accounting, auditing, operations, security, insurance, investments, retail lending, commercial lending, budgeting, forecasting, financial analysis, and personnel.

Ms. Eileen Rodriguez serves as Director for the Small Business Development Center at the University of South Florida. She is a Certified Business Analyst. Eileen has been working with the SBDC since 1997, providing one-on-one confidential counseling and teachings seminars in English and Spanish on small business start-up, international trade, and women and minority certification.

SBA Recovery Loans:

• The law will extend SBA Recovery loans (with the 90% guarantee and reduced fees) through December 31, 2010.
• The law will permanently increase 7(a) and 504 limits from $2 million to $5 million (for manufacturers in 504 loan program, up to $5.5 million).
• The law will permanently increase microloan limits from $35,000 to $50,000, helping larger entrepreneurs with start-up costs and small business owners in underserved communities.
• The law will increase maximum amount of SBA Express loans from $350,000 to $1 million (expires 9/27/2011).
• The law will allow some small businesses to refinance their owner-occupied commercial real estate mortgages into the 504 loan program (expires 9/27/2012).
• The law provides for funding up to $20 million per year in small business loans over the next three years for an intermediary-facilitated loan program targeting small businesses that need loans up to $200,000.

Exporting:

• The law turns the Export Express pilot loan program into a permanent program with 90% guarantees for loans up to $350,000 and 75% for loans between $350,000 and $500,000.
• The law provides $90 million in competitive grants over next three years for states to help small business owners with exporting.

Federal Contracting:

• The law gives agency procurement officers more ability to provide both large prime contracts and mircocontracts to small businesses. The law makes it harder for agencies to “bundle” contracts, a practice that often takes opportunities away from small business. The law also has stronger enforcement so agencies will be held more accountable for reaching small business goals.
• The law enforces stronger subcontracting plan requirements for large prime contractors to ensure small businesses are utilized in subcontracting. It also discourages late payments to small subcontractors.

Extension, Expansion of Tax Cuts

For more detailed information, please click on this link:� http://www.sba.gov/jobsact/

In spite of the fact that 55 percent of the bankers said the credit quality of potential borrowers has increased in the past six months, these banks also reported that they declined 72 percent of cash flow-based loans, 90 percent of real estate-based loans, and 46.7 percent of collateral-based loans. The quality of cash flow and earnings were cited as the top two reasons that loans were declined, followed by weakening industries and current debt loads.

Therefore, it appears that the banks are more risk-averse, which also seems to be indicated because almost 39 percent of the bankers said they had tightened up their loan agreements’ financial covenants in the last six months.

It is no wonder why the number one concern for the surveyed businesses is access to capital, coming in even higher than their concern regarding the economy. Although 71 percent of the businesses believe that additional capital would allow them to grow revenues, the key question remains �Will the banks provide the capital to lead us out of the recession or will they wait to make more capital available only when the economy is clearly in recovery?�