Last updated 14 hours ago
2/14/2012
A tool created by loan financier Multifunding helps small business owners determine which banks are more apt to provide a small business loan, CBS Philly reports.
The tool grades nearly 7,000 banks on an A to F scale, based on the ratio of small business loans to its domestic deposits. For example, according to Multifunding's website, an A grade consists of financial institutions that use 25 percent or more of their deposits to make small business loans. Thus far, nearly 3,000 banks have been granted A grades.
According to CBS, the tool also found that 70 of the 100 largest banks in the nation received grades of C or below, meaning they use between 6 percent and 10 percent of their deposits to grant loans. In all, nearly 400 banks have received a C grade, Multifunding's website reports.
"If you are going to go for a bank loan, go to a smaller bank, go to a community bank, go to a bank that is focused on doing what you need," Ami Kassar, CEO of Multifunding, told CBS.
Ocean Capital, a small business lender, publishes The Real Deal on their website to keep small businesses up-to-date with the latest news and events that affect them. Read more of the latest news here.
Last updated 1 day 14 hours ago
2/13/2012
The rise of peer-to-peer lending for small business loans has taken place because there's a personal aspect that customers can't achieve with big banks.
"With community loans, people know what they're getting into," Forbes explains. In addition, many small companies may not have been around long enough to create trust in larger financial institutions.
"If you're a small business and you don’t have an established credit history … you don't have ways those ways that financial institutions can look back see your history, you're pretty much taken out of the game," Choncul Gupta, CEO of a Louisiana-based P2P lending firm, told the media outlet.
P2P lending works when an investor opens an account with a P2P firm, and builds a portfolio by funding loans in small increments - usually $25 to $50, Your News Now reports. That amount is then pooled with money from other investors and a loan is issued to the borrower at an APR based on risk level, with yields as high as 16 to 18 percent.
The primary risk of P2P lending is that loans are not insured by the Federal Deposit Insurance Corporation, so the investment disappears if the borrower doesn't pay.
Ocean Capital, a small business lender, publishes The Real Deal on their website to keep small businesses up-to-date with the latest news and events that affect them. Read more of the latest news here.
Last updated 2 days 14 hours ago
2/13/2012
Crowdfunding is essentially defined as raising small amounts of money from a large number of sources, according to BostInno. It's an alternative startups can turn to if they can't secure a small business loan or SBA loan.
Currently, only large, accredited investors or close family friends can invest in private startups. The reason for this, according to Bill Sahlman, a professor of entrepreneurial finance at Harvard Business School, is because the government is attempting to protect investors from making rash decisions, especially since many of them aren't wealthy enough to sustain a loss following a risky investment.
"It's a long tradition between trying to allow commerce to take place but also put in place regulations that would protect people from doing stupid things," Sahlman told the media outlet.
However, the Boston Herald reports that entrepreneur Nicholas Tommarello is attempting to change what he believes to be outdated rules, forming a crowdfunding platform called WeFunder. He's been using the site to collect signatures to petition to Congress to allow individuals and smaller companies to invest, and has already eclipsed $5 million in pledges.
The only downside of pushing a bill through would be that sometimes, having a lot of small investors may make it difficult for a startup to attract larger venture capitalists.
Ocean Capital, a small business lender, publishes The Real Deal on their website to keep small businesses up-to-date with the latest news and events that affect them. Read more of the latest news here.
Last updated 3 days ago
2/9/2012
Following a December 2011 approval by the Westmoreland, County, Virginia board of supervisors, the city has now begun the bidding process for the construction of a new judicial complex, the Journal Press reports.
The building would be funded primarily by a USDA loan through the agency's Rural Development program for more than $9 million. Norm Risavi, the Westmoreland board's county administrator, recently filed an application for the loan.
The new building will be two stories and sit immediately adjacent to the George D. English building, which currently houses both the courts and county government department. Once the new complex is completed, the sheriff's office, emergency dispatch center and all other court staff and resources will be allocated there.
According to Risavi, there is no shortage of bidders for the project.
"Various public projects around the Commonwealth are attracting significantly more bidders than the pre-recession time period," he told the news source. He added that at least 15 construction firms have already expressed interest in bidding.
However, not everyone is excited about the project. A Facebook group called "We protest a $13 million courthouse in Westmoreland County, Virginia" has been created, claiming that there are better uses for the county's funds.
Ocean Capital, a small business lender, publishes The Real Deal on their website to keep small businesses up-to-date with the latest news and events that affect them. Read more of the latest news here.
Last updated 4 days ago
2/8/2012
With 2012 being an election year, both Democrats and Republicans are reaching out for votes by detailing positive changes they will make to the economy, Small Business Trends reports.
President Barack Obama is at the forefront of these efforts, and is "positioning himself as an advocate for entrepreneurship and innovation."
Obama has proposed his Startup America Legislative Agenda, which would essentially eliminate taxes on capital gains in small business investments. It would also provide a 10 percent income tax credit for new hires and double the amount startups can deduct to $10,000.
This is important, considering big banks are still making it difficult for small business owners to acquire business loans. The news source notes that many institutions still ask for three years' worth of financial data - a tall order given the sorry state of the economy in 2009 and 2010.
The President also recently showed his support for the U.S. Small Business Administration by elevating SBA head Karen Mills to his cabinet.
The Washington Post reports that through the first three months of the SBA's fiscal year (ending December 31), it doled out 126 SBA loans totaling $43.4 million to small business. According to Bridget Bean, overseer of the SBA's Washington region, numbers are back to a "pre-recession pace."
Ocean Capital, a small business lender, publishes The Real Deal on their website to keep small businesses up-to-date with the latest news and events that affect them. Read more of the latest news here.
