Hey all, check out "7 Ways to Finance a Small Business" from BusinessNewsDaily

7 Ways to Finance a Small Business
By David Mielach, BusinessNewsDaily Staff Writer
Nov. 30, 2011

The road to starting a successful business can be a long one, filled with many hurdles and obstacles along the way. Even if you have a great business idea, no business can succeed without a financing plan. While the process may sound daunting, there are many small business financing options for anyone thinking of starting their own business in 2012.

• Small Business Administration Loan
• Friends and Family
• Home Equity Loan
• Credit Cards
• Angel Investors
• Venture Capitalists
• Strategic Investors

To learn more about each option, including advantages and disadvantages... click here to read the full article.

Check out... Big Banks Shrinking As SBA Lenders

www.boss.blogs.nytimes.com
You're the Boss: The Art of Running aSmall Business
By: Robb Mandelbaum
08/10/2011

The Small Business Administration's guaranteed loan program is back. Nudged by stimulus provisions that reduced fees and increased guarantees, American banks made a record amounf of S.B.A. backed loans in 2010 (measured in dollars), reversing a demoralizing four-year slide. But there's something noteworthy about who was doing that lending: while banks as a whole loaned more government-backed money than ever, the biggest banks loaned less.

The 25 American banks with the most deposits in 2010 underwrote $3.6 billion in S.B.A. general business, or 7(a), loans. That is just 20 percent of all 7(a) loans approved that year, down nearly a third from the share these same banks loaned in 2006. The decline cannot be tied to a decline in deposits. In that same period, these banks grew to control $5.8 trillion in deposits, 61 percent of all bank deposits in 2010.

In other words, in 2010 the 25 biggest banks held 32 percent more in deposits than those banks did in 2006 - but approved 30 percent less in S.B.A. loans...

read the rest of the article... click here.

Check out... Businesses Put Up for Sale Smack Into Harsh Reality

By Sarah E. Needleman
Wall Street Journal (WSJ.com)
October 14, 2010

Small-business owners banking on a big payoff when they sell their establishments may have to settle for a lot less than planned.

A combination of tight credit, skittish buyers and business owners unwilling to sell at rock-bottom prices - factors similarly affecting home sellers - has left the small-business marketplace at a standstill.

David Wetzel says he spent two years trying to sell his business, Dorst Hardware, a Ventnor City, N.J., shop he's owned since 1993. He's now liquidating the business and expects to earn only about a third of his asking price. "I had some very close leads who wanted to buy, but they could just not get the financing," says Mr. Wetzel, who is 64 years old.

to read the full article... click here.

Business For Sale market has flatlined...

BizBuySell.com has recently released its latest economic data for Third Quarter of 2010. The company's data, which tracks trends in the business-for-sale marketplace, suggests that the business-for-sale market has bottomed out, but a recovery will still be slow in coming.

The number of closed transactions reported to BizBuySell.com in Third Quarter 2010 was 1,117, exactly equal to 1,117 reported for this same time period a year ago.

These numbers indicate that the business-for-sale market has flat-lined, with earlier signs of recovery stalling out in the second half of this year. Although we do see a slight 1% increase compared to the 1,106 closed transactions reported for Q2 od 2010, the market is still down considerably from previous years...

The biggest problem remains a lack of available credit for small business acquisitions, which continues to make life tough for business brokers and business owners looking to sell.

To read the full article... click here.

Check out... SBA Program Proves a Hit, but Now It Is in Limbo

By Ruth Simon
August 5, 2010
Wall Street Journal (WSJ.com)

Pinnacle Bank made just two loans through Small Business Administration in 2007 & 2008. So far this year, the Orange City, Fla., bank's total is nine, to borrowers from an auto dealer to a computer-equipment wholesaler to a bakery.

"The SBA program is the only way we can continue to lend right now," says David Bridgeman, president of Pinnacle, which has two branches and assets of $213 million, including about 600 loans. For many of the $3.4 million in loans Pinnacle made through the SBA in 2010, the bank has to set aside capital against only the 10% slice that isn't guaranteed by the U.S. government.

Across the nation, many banks have turned to the SBA's so-called 7(a) program to help unfreeze credit. Nearly 3,000 lenders have made 7(a) loans in the current fiscal year, up 21% from 2008.

The 7(a) program, the SBA's largest loan program, is hardly a cure for the credit shortage affecting many borrowers. The agency is involved in less than 10% of all small-business loans, and some banks won't participate because of red tape. Lenders must follow the SBA's rules when making 7(a) loans, which can be used for working capital, fixed assets and other business expenses. The term of the loan can be as long as 25 years.

Last year, Congress temporarily sweetened the 7(a) program by increasing the SBA guarantee to 90% of any given loan from as little as 75% previously. Lawmakers waived fees costing borrowers as much as 3.5% of the loan amount, as well as costs charged in a separate SBA program providing structured financing for fixed assets.

But the sweetened program is now in limbo, drawing complaints from borrowers and lenders, as lawmakers haggle over broader small-business legislation.

To read the full article... click here.

The SBA Has a Deal for You

It's called a 504 loan. Here's what you need to know about it.
By Marshall Eckblad
Wall Street Journal: Small Business Online
June 21, 2010

The government is trying to entice more small businesses to tap one of its loan programs. Before applying for one of these loans, though, there are some fine points borrowers should consider.

The Small Business Administration's 504 loan program lets companies take out fixed-rate financing to buy property, build or expand facilities, or refinance some existing mortgages. The borrower typically needs to put down just 10% of the transaction's total price.

With the weak economy deterring many small businesses from expanding in the past couple of years, demand for these loans plummeted: Last year, the SBA approved $3.8 billion in 504 loans, down 28% from 2008 and 40% from 2007. Hoping to spur expansion among small companies, the SBA is offering inducements like lower rates and no-fee deals.

To read more... click here.

Three Best Ways to Court a Community Bank

By EMILY MALTBY
Wall Street Journal, WSJ.com

Discouraged by big-bank practices and bureaucratic procedures, many Main Street firms have "gone local" with their lenders. Community banks are often more willing than their larger counterparts to conduct business on a handshake because they understand the needs of their neighboring establishments and, in many cases, have underwriters in-house to approve loans.

In exchange, however, those lenders expect more from their borrowers. "It's like that old saying, dig a well before you are thirsty," says Brian Carlson, president of Excel National Bank, a standalone lender in Beverly Hills. "It can take some time before [a banker] says, 'I know this guy and I'm confident he'll do what he says he'll do.' Having that relationship is valuable because if you need $300,000 by the end of the week to take advantage of an opportunity, the bank will jump to get it done."

Here are the three best ways to develop a relationship with a community lender:

To read more... click here.

U.S. Banks Post Profits, but Woes Persist

Sherpa--This might be a clue as to why credit is so tight.

By MICHAEL R. CRITTENDEN
Wall Street Journal, WSJ.com

WASHINGTON—A total of 775 banks, or one-tenth of all U.S. banks, were on the Federal Deposit Insurance Corp.'s list of "problem" institutions in the first quarter, as bad loans in the commercial real-estate market weighed on bank balance sheets.
Poor loan performance in other sectors also continued to hurt banks, with the total number of loans at least three months past due climbing for the 16th consecutive quarter, FDIC officials said in a briefing on Thursday.
"The banking system still has many problems to work through, and we cannot ignore the possibility of more financial market volatility," FDIC Chairman Sheila Bair said.
There were 702 on the FDIC's "problem" bank list at the end of 2009 and 252 at the end of 2008.
FDIC officials said they expected the number of failed banks to peak this year after climbing steadily over the past three years. Regulators have shut 72 banks so far this year, more than double the number closed by this time last year. Ms. Bair said regulators were preparing for a steady pace of additional closures through the end of the year. A total of 237 banks have failed since the beginning of 2008.
The failures continue to strain the FDIC's fund to protect consumer deposits, although officials signaled they were confident they had enough cash on hand to deal with the expected spate of failures, without having to assess new fees on the banking industry. The agency's deposit insurance fund stood at negative-$20.7 billion at the end of the first quarter, a slight improvement from the end of 2009.
"We have the necessary industry-funded resources to complete the cleanup," Ms. Bair said, in a reference to the fees that the agency assesses on banks for insuring their deposits.
Banks, squeezed by problem loans and the continued recession, responded by reducing their lending. The industry's total loan balances grew by 3% during the quarter, but the increase was due to accounting changes that required banks to bring securitized assets back onto their balance sheets. Without taking into account these accounting changes, lending would have declined for the seventh straight quarter, as banks cut back across most major lending categories.

To read the full article …click here.

End Of an Era... Paul Paquette

One of my favorite bankers is leaving the profession to follow a different career path. Paul Paquette at Wells Fargo has been one of the area's top SBA lenders. Paul has been known for his diligence, hard work and professionalism. I liked working with Paul as he was quick to give a "yes" or "no" on a deal, and if it was a "yes" he worked hard to close the loan. In addition he was always patient with my "lobbying" about the merits of a transaction. Good luck Paul in your new career!!!!