90 Percent Guarantee on SBA 7a Loans End

The authorization for the 90 percent guarantee on 7(a) loans ended on May 31, but the authorization for fee waivers is in place through September 2010. Unless Congress authorizes additional funds the SBA guarantees on 7(a) loans will be 85% on 7(a) loans $150,000 or less and 75% on 7(a) loans over $150,000.

Big Banks Loan Less to Small Businesses

According to a May 2010 Congressional Oversight Panel report, in spite of the big banks having increased their share of small business lending over the last decade by 4.1%, between 2008 and 2009 their small business loan portfolios fell by 9.0%.

So many borrowers began to look to local banks to pick up the slack, but smaller banks are constrained by their exposure in their existing loan portfolio, closer oversight by bank regulators, and their uncertainty regarding the economy. Therefore, many small businesses have struggled to find adequate financing.

Numbers Must Tell the Story of Success

Your ability to make the lender believe in you is critical to obtaining the loans necessary for your business to succeed. However, the financial statements of your business provide an objective source of information as to past and future financial success.

Vase One Floral, LLC – a Small Business Success Story

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Vase One Floral Design Studio, LLC is a Tampa, Florida based establishment which was launched on November 9, 2009.  Proprietor Rhonda Pittman invested $15K from personal savings to finance start-up expenses.  Understanding her market segment:  Ms. Pittman immediately began to brand her enterprise as a custom floral design studio specializing in the art of distinction.  She and her staff take pride in providing exquisite customer service.   They cater to the floral needs of weddings; sorrowful events; life occasions; and interior design.  Daily deliveries as well as corporate and residential installation accounts are available.

GOT MONEY?

So… the bank declined your loan request for your business space? Are you frustrated yet? Wonder what to do Snow? Two words: Don’t surrender! Just one in nine new businesses get bank loans for their facilities, anyway. Here are some other, probably even better, ideas.

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How to Find Private Investors

This is not about finding venture capitalists. This is about finding private investors [also known as angels] to finance your business. Venture capitalists have become professional investors of other people’s money. They are very conservative! Less than 1% of businesses seeking money from venture capitalists receive it. Private investors fund approximately 20% of the proposals presented to them. Private investors fund 300 businesses for every one business funded by traditional venture capitalist. Private investors do not usually make a living from investing in other people’s businesses. These “angels” are the largest source of risk capital in the country. Approximately one million private investors provide capital for businesses each year. Although this figure includes relatives, friends, and associate, one third of these angels were strangers to the entrepreneurs. Most of these investors made their fortunes by starting businesses and they use their discretionary money to invest in private business opportunities.

Grants for Small Business – Myths versus Reality

So, you are looking for a grant to start or grow your business. You know that there is an abundance of money out there just waiting for you. You know this because your friends tell you so, the media tells you so, books tell you that all you need to do is just ask for your check, and infomercials bombard you with the message that anyone can get a business grant. Maybe, you attended a seminar where you were told that this is true and in order to find these grants all you have to do is buy their books, tapes, and/or consulting services. How probable is it that you can find a grant for your business? Is what you know the whole truth, the partial truth, or a myth?

The answer to these questions is that there is a kernel of truth in what you have been told; enough of it is true so that the source does not risk serious legal liability. However, read and listen closely to their words. Although they give the impression that these business grants are available in great abundance and are yours for the asking, the whole truth is that they have many restrictions. In the last six years, I have assisted 2,115 clients in finding money for their businesses. Only 22 (1%) of those clients received a business grant and almost all of them received their grants from a state of Florida program that is available only to the disabled and Native Americans. In my nine years of business counseling, I am not aware of anyone who ever received a business grant from any source they directly identified upon buying a book, watching an infomercial, or paying a grant consultant. So, what are the common myths and realities? Are there any grants available for your business?