Using Retirement Funds to fund a business start-up??

With the current difficulty in obtaining start-up funding to launch a new business venture, some budding entrepreneurs are looking at every option and alternative they can find. One potential option may be to use retirement funds you have built up over time to fund the venture. I stress this is absolutely NOT a recommendation to follow this course of action, only one of many potentials to consider and decide based on your own analysis and evaluation of the risks involved.

I found a good list of points to consider when you are considering this option from a financial services group. (Again, NOT a recommendation for or against this firm, only a useful list they have on their website). Please click here to review this list.

There is also a firm that claims it was the first one to use this tactic and has a track record in this process. You can review additional information on the process and this firm by clicking here. (Again, NOT a recommendation for or against this firm, only a useful listing of how the process works on their website)

Finally, the MnSBDC stands ready to help serious entrepreneurs to start and grow their businesses and any of our 9 regional offices can serve small business clients in the state of Minnesota. Find the location of the center nearest you by clicking here. If you are outside the state of Minnesota, please seek out your local SBDC network for assistance.

BBB calling for nominations for its 11th annual Integrity Awards

The Better Business Bureau of Minnesota and North Dakota (BBB) is calling for nominations for its eleventh annual Integrity Awards. The BBB Integrity Award recognizes companies that display outstanding ethics in dealings with customers, employees, vendors and the community. All for-profit businesses of any size, owned or operated in Minnesota or North Dakota, are eligible. Nominees must have a satisfactory rating with the BBB; however membership is not a requirement to compete for the award. The nomination deadline is April 30th, 2010.

Companies can be nominated by visiting www.thefirstbbb.org, or by sending the company name, contact name, address and phone number, along with the nominator’s name and phone number to BBB, Attn: Integrity Awards, 2706 Gannon Rd., St. Paul, MN 55116; or faxing the information to 651-699-7665.

Entrants are judged on four areas of their business:

1. management practices;
2. customer/vendor/supplier/shareholder relations;
3. marketing/advertising/communications/sales practices;
4. and reputation within their industry/community.

Once nominated, the nominee will receive an official entry form from the BBB. An independent panel of judges will decide the award finalists and recipients. Winners will be announced live at the BBB's 2010 Integrity Awards in October (details to follow). Winners will also be recognized in Integrity Awards publicity and will be eligible to compete for the National BBB Torch Award for Marketplace Ethics.

For more information on the Better Business Bureau, visit the Bureau’s Web site at www.thefirstbbb.org or call 651-699-1111, toll-free 800-646-6222.

SBA Stimulus Loans Reauthorized

The President signed a bill on 3/2/2010 that reauthorizes the expired 90-percent guarantee on the S.B.A.’s general business loans through March 28th. The $60 million appropriation funds this higher guarantee and eliminates borrower fees for both the 7(a) and the 504 loan program.

Latest in a Series of New Small Business Proposals by President Obama

1. Expand SBA’s existing 504 program to temporarily support refinancing for owner-occupied commercial real estate loans:

The Administration is proposing legislation to temporarily allow for the refinancing of owner-occupied commercial real estate (CRE) loans under the SBA’s 504 program, which provides guarantees on loans for the development of real estate and other fixed assets. Currently, 504 loans cannot be used for the refinancing of maturing debt. This change would respond to the difficulties many current, solvent borrowers face in refinancing existing commercial real estate loans.

Businesses with a loan maturing in the next year who are current on all loan payments will be eligible. Lenders that are refinancing mortgages for existing customers will make a loan for up to 70 percent of the current property value; and SBA will help finance the remaining 20 percent. For new lenders taking on a refinancing project, SBA will take on a greater share of financing, up to 40 percent.

2. Temporarily increase the cap on SBA Express loans from $350,000 to $1 million:

The President is proposing to temporarily increase the maximum SBA Express loan size to $1 million, which would expand the program’s ability to help a broad range of small businesses through a streamlined approval process. Unlike traditional 7(a) loans, lenders can use their own paperwork for SBA Express loans, which can be structured as revolving lines of credit. Currently, these Express loans are capped at $350,000 and carry a 50 percent guarantee. Fees would cover virtually all of the added costs of this proposal.

These proposals complement the President’s broader small business agenda - a key part of his overall jobs plan. The other elements of the small business agenda include:

• Extending small business expensing and bonus depreciation for 2010. Eliminating capital gains taxes for small businesses in 2010.

• A Small Business Jobs and Wages Tax Credit that would cut taxes for more than 1 million small businesses by paying up to $5,000 for every net new job and covers payroll taxes on overall wage increases in excess of inflation.

• A proposal to transfer, through legislation, $30 billion to a new Small Business Lending Fund that will support lending by community and smaller banks.

• Additional SBA lending proposals, including an extension of the Recovery Act programs that eliminate fees and raise guarantees on SBA’s two largest loan programs and permanent increases in the maximum loan sizes for major SBA programs.

What Trends will impact Small Business this year?

Predicting the future is a favorite past-time, especially at the start of a year. Understanding trends is a bit more useful for trying to figure out where the small businesses that the MnSBDC serve may be impacted.

Here's an interesting article from US News and World report that lists "21 Things We're Learning to Live Without". By studying this list, you may be able to better prepare for the potential impact on small businesses. There are also interesting 'hyperlinks' scattered throughout the article that lead to additional stories on selected topics.

So - ready to predict the future?

SBA, Dell Launch New Educational Video Series to Help Small Businesses Grow, Create Jobs

WASHINGTON – Highlighting the experiences of successful entrepreneurs, the U.S. Small Business Administration and Dell today launched an online video series offering tools and strategies to help small business owners rebound from the economic recession and put themselves in a position to expand and create jobs.

Strategies for Growth: Advice for Expanding Your Business includes real-world insight, solutions and advice from small business owners who’ve succeeded, in good and bad economic times. Additionally, the series draws on the expertise of counselors, policy makers and others for accessing resources and tools available to small business owners.

The Strategies for Growth video series highlights key topics that engage small business owners in issues critical to small business growth. These areas include Planning for Growth, Government Contracting, Team Building, Marketing, Technology, Exporting Opportunities, and Disaster Recovery. Also featured is a Profiles of Success segment that spotlights two successful entrepreneurs.

The Strategies for Growth video series features a range of growing small businesses from across the country, including a design firm, a vegetarian restaurant and bakery, and a green construction company. They are:

1. Grace Dittmar, Trusted Mission Solutions of McLean, Va.
2. Warren Brown, CakeLove of Washington, D.C.
3. Don Matzkin and Anthony Bracali, Friday Architects of Philadelphia, Pa.
4. Juan and Luis Yépez, Mainstream Global of Lawrence, Mass.
5. Ann-Marie Harrington, Embolden of Pawtucket, R.I.
6. Laurie Benson, Inacom of Madison, Wis.
7. Bryan Vulcan, FourFront Design of Rapid City, S.D.
8. Avinash Rachmale, Lakeshore Engineering of Detroit, Mich.
9. Jenna Sellmeyer and Jennifer Fogg, ASSET Group of Oklahoma City, Okla.
10. Jesus & Luisa Mendoza, Mr. Natural of Austin, Texas
11. Andrew Kruse, Southwest Windpower of Flagstaff, Ariz.
12. Mary Tappouni, Breaking Ground Construction of Jacksonville, Fla.

Strategies for Growth is available on the SBA’s Web site at www.sba.gov/StrategiesForSuccess and at the SBA’s YouTube channel at www.YouTube.com/sba. Each topic is indexed by subject and includes additional resources for entrepreneurs.

SBA Release Number: 09-82

Tax Preparation Help for Small Business Owners

Live Web Chat with AICPA Vice President of Taxation Thomas P. Ochsenschlager Wednesday, December 16, from 1:00 p.m. to 2:00 p.m., ET

WASHINGTON – The SBA’s Web Chat series picks up in December, as the 2009 tax filing season approaches. Small business owners can begin to prepare now with useful year-end tax tips and information. Business owners can learn more about tax savings tips and mistakes to avoid.

WHO: Thomas P. Ochsenschlager, Vice President of Taxation, American Institute of Certified Public Accountants (AICPA) will host the SBA’s December Web chat on “Tax Preparation for Small Business Owners.” Ochsenschlager will answer questions about the importance of year-end tax planning and preparation.

WHAT: SBA’s Web chat series, providing small business owners with an opportunity to discuss relevant business issues online with experts, industry leaders and successful entrepreneurs. Chat participants will have direct, real-time access to the Web chats via questions they submit online in advance and during the live session, with instant answers.

WHEN: December 16, 2009, 1 p.m. ET
Ochsenschlager will answer questions for one hour.

HOW: Web chat participants can join the Web chat on December 16 online at https://eweb1.sba.gov/livemeeting/Dec09. They also can post questions for Ochsenschlager in advance online at the same URL.

To review archives of past Web chats, visit online at http://www.sba.gov/tools/monthlywebchat/index.html

US SBA Advisory Number: MA09-14

US SBA Economic Injury Disaster 11956 of ND with affected MN Counties Listed

Attached is a PDF file of the contiguous MN counties covered by the above designated disaster.

In MN it is the following counties;
Clay, Kittson, Marshall, Norman, Polk, Traverse, Wilkin

Click here for the file

Bonding Assistance available for Disadvantaged Business Enterprise (DBE) for DOT projects

The bonding assistance provided by the DBE ARRA BAP will allow DBEs with traditionally less working capital than large transportation-related contractors to perform on transportation infrastructure projects receiving ARRA funding from any DOT Operating Administration, such as Federal Highway Administration (FHWA), Federal Transit Administration (FTA), Federal Aviation Administration (FAA), Federal Railroad Administration (FRA), and the Maritime Administration (MARAD).

The term DBE means a for-profit small business concern that is owned and controlled by one or more socially and economically disadvantaged individual(s), including women, and is set forth in Title 49 Code of Federal Regulation Part 26 (49 CFR 26).

Click here to view the PDF file with all the information.

Link to the complete program information.

$10 Billion reduction in Small Business Lending by Big Banks

MnSBDC clients have been experiencing the "credit crunch" first hand. While Mn leads the nation in ARC loans that have helped small business clients to continue to operate, these loans come primarily from regional and community banks rather than the large national banks. The latest data indicates that the large banks that have received TARP funds designed to help spur lending to small business clients have in fact pulled back from lending to small business.

The notable exception among big banks is US Bank (US Bancorp), headquartered in Minneapolis, which increased it's lending by almost 2%. Also, BB&T Bank (located in the Southeast) remained essentially at the same level for small business lending.

Click here for the full story.

Twin Cities Metro SBDC Regional Director, Mike Ryan, featured in news article.

Mike Ryan, Regional Director of the Twin Cities Metro SBDC hosted by the University of St. Thomas is quoted in this news article on entrepreneurs who are starting up their own businesses by 'Finance and Commerce' online magazine.

Click here for full article.

US SBA Loan Servicing Matrix

On Oct 20, 2009 the US SBA published their latest 'Unilateral Action Matrix' for Servicing and Liquidation Actions for their popular 7a loan.

What is this and why is it important?

If you don't have a US SBA 7a loan it may not interest you, but if you do have this type of loan or are servicing this loan the information gives the 'rules of the road' for what you may and may not do in servicing and liquidating the 7a loan.

For our MnSBDC Professional Business Consultants who work with clients and lenders that use a 7a loan, this information is useful for understanding options, especially if the client is in a work out situation.

Here's the link to the PDF file matrix located on the US SBA Website.

Inventors Bonanza!

What: Innovation Roadshow Workshop, brought to you by the US Department of Commerce's NIST/MEP Network
When: Saturday, November 21st - 8:30 a.m. to 5:00 p.m.
Where: Mall of America Executive Center, 4th Floor, 60 E Broadway, Bloomington MN 55425 park in P5
Fee: $99.00, includes lunch and 2 breaks

It's all about helping you get your invention to market & includes:
• Access to a live invention marketing workshop by Eureka! Ranch International
• A $2000 market research report endorsed by the U.S. Department of Commerce's National Institute of Standards & Technology
• Publication of invention research reports to the official USA National Innovation Marketplace
• Help in making connections to buyers, licensees, manufacturers, etc., from the 1,600 person strong NIST/MEP network.

For more information - go to the Minnesota Inventors Congress website and look for the "Innovation Roadshow" link on the Right Hand side of the site.

UMC BUSINESS STUDENTS GIVE PRESENTATION TO BEMIDJI BUSINESS MEN AND WOMEN

In collaboration with Jorge Prince, director of the Northwest Minnesota Small Business Development Center (SBDC), the students addressed the use of social media in communicating and marketing with customers.

Click here for the full story.

In addition to this presentation, the students are working with regional small businesses through the SBDC to develop marketing plans that address those businesses’ specific needs.

Statement by Administrator Karen Mills on President Obama’s Proposal to Raise SBA Loan Limits
Release Date: October 21, 2009 Release Number: 09-73
Contact: Hayley Matz (202) 205-6948 Internet Address: http://www.sba.gov/news

WASHINGTON – The U.S. Small Business Administration today issued the following statement by SBA Administrator Karen Mills on today’s proposal by President Barack Obama to raise the maximum loan size for SBA-backed loans to small business:

“America’s 29 million small businesses have been hard hit in this recession. Nine months ago, President Obama sent small businesses a life line: the American Recovery and Reinvestment Act. Since then, the SBA has supported more than 33,000 loans for a total of almost $13 billion in small business lending. This has helped save or create tens of thousands of jobs.

“But there is much more work to be done, which is why President Obama today pledged his support for legislation that would increase the maximum size of some SBA loans. Increasing maximum loan sizes will allow the SBA to ensure that more small business owners and entrepreneurs can get access to the credit they need to expand their operations and create jobs.

“The President also announced additional support from the Treasury Department for smaller community lenders that are committed to increasing their lending to small businesses. Secretary Geithner and I will host a conference on small business lending with Members of Congress, regulators, lenders and the small business community. The conference will discuss additional efforts that can be taken to provide small businesses with access to credit. These steps, coupled with SBA’s ongoing efforts, will help small businesses grow and create jobs throughout America.”

Specifically, President Obama called for:
• Increasing the size of SBA’s 7(a) loan from $2 million to $5 million.
• Increasing the size of SBA’s 504 loan from $2 million to $5 million for standard borrowers (supporting a total project of $12.5 million) and from $4 million to $5.5 million for manufacturers (supporting a total project of $13.75 million).
• Increasing the size of SBA’s Microloan from $35,000 to $50,000.

A copy of the President’s remarks and a fact sheet on the announcement can be found at:
http://www.sba.gov/idc/groups/public/documents/sba_homepage/sba_rcvry_obama_evnt_remrks09.pdf.

A fact sheet on the proposal can be found at: http://www.sba.gov/idc/groups/public/documents/sba_homepage/sba_rcvry_new_effort_credit_sb.pdf

# # #

SBA disaster loans available in Minnesota


MINNEAPOLIS — The Small Business Administration says disaster loans are available in some eastern Minnesota counties because of the drought that began earlier this year.

The affected counties are Carlton, Chisago, Goodhue, Pine, St. Louis, Wabasha, Washington and Winona. Those counties are eligible because they're next to Wisconsin counties where the U.S. Department of Agriculture issued a disaster declaration.

The SBA says its federal economic injury disaster loans are available to small businesses, small agricultural cooperatives and most private nonprofits of all sizes.

Farmers and ranchers are not eligible to apply to the SBA, but nurseries are eligible for losses caused by drought.

The application deadline is May 25, 2010.

———

On the Net:

Loan applications can be downloaded from the SBA Web site:

http://www.sba.gov/services/disasterassistance

SBDC Client Featured in the Press

This SBDC client is featured in the local newspaper in the North Central MnSBDC Region. The client developed an infant support pillow to help support her child's head and neck. The Professional Business Consultant who assisted the client was Mr. Tom Willett (Thanks Tom!), and thanks also to Regional Director Greg Bergman for sharing this story.

Please consider contacting your local media to feature other successful SBDC clients in your region. Click on the link below to read the entire story.

Baby Elephant Ears

SBA Launches New Online Training Course: Winning Federal Contracts – A Guide for Women Entrepreneurs

WASHINGTON ─ Women who own small businesses will be able to use a new online U.S. Small Business Administration training course to learn how to identify and take advantage of federal contracting opportunities. The new training course, Winning Federal Contracts: A Guide for Women Entrepreneurs, is part of an ongoing government-wide initiative to promote opportunities for women-owned businesses in the area of government contracting.

This free online tutorial is a practical and easy to use guide that walks a woman-owned small business through the contracting process. SBA is committed to ensuring that women-owned businesses receive at least 5 percent of federal contracts and believes better training opportunities are central to meeting this government-wide goal.

Winning Federal Contracts course is designed to help women entrepreneurs learn about the federal procurement process and to prepare them to compete for contracting opportunities. The self-paced guide uses audio and script to provide information about contract rules, how to sell to the government and where to find contracts.

The Winning Federal Contracts course is available on SBA’s Web site at www.sba.gov or directly at www.sba.gov/fedcontractingtraining. It is indexed by subject matter, and includes direct links to additional contracting resources

SBA Administrator and Local Officials Spotlight Economic Relief to Minnesota Small Business

Over $10 Million Dollars in ARC Loans Already Disbursed to Nearly 700 Businesses in the Twin Cities Through the U.S. Small Business Administration

SBA Administrator Karen Mills joined Venture Bank at a news conference on Wednesday, September 23 at Crystal Kitchen Center (3620 Winnetka Ave N, Crystal, MN) to recognize the positive impact the American Recovery and Reinvestment Act (ARRA) is having on local small businesses’ ability to secure financing.

JoLynn Johnson of Crystal, Minnesota took advantage of SBA’s loan products by accessing an American Recovery Capital (ARC) loan which helped her meet day to day operating costs. The ARC loan provides no interest, deferred repayment loans of up to $35,000 used to pay down existing debt---providing a “bridge” for viable small businesses facing economic challenges.

“The ARC loans are another tool in the SBA toolkit which can provide critical support to small business owners like JoLynn Johnson to fulfill the American dream and keep their doors open,” said Administrator Karen G. Mills.

SBA’s instant capital infusion allowed JoLynn to get back on track. "Cutting costs, managing expenses and doing everything right doesn’t help when the customers aren’t buying due to uncertainty in the economy," says JoLynn Johnson, President of Crystal Kitchen Center, Inc. "The ARC loan is helping my business survive through these tough economic times."

Since 1975, Crystal Kitchen Center has earned a reputation in the upper Midwest for providing quality and leadership in kitchen and bath design. They work with new construction as well as renovations, providing services from design to complete "turn-key" remodeling. With their 8800 square foot showroom customers can find inspiration for their style. Crystal Kitchen Center prides themselves on designing and supplying cabinetry and counter tops for unique kitchens, bathrooms, entertainment centers, laundry rooms, home offices, lower levels, and outdoor kitchens. Their award-winning Certified Kitchen Designers are also versed in aging-in-place and green design, helping make their customer’s dreams come true.

"Now is the time for SBA loans. With 90% guarantees, temporary fee eliminations and the ARC loan program, Venture Bank is able to meet our goal of helping our customers grow their business and be successful. We are very strong supporters of the SBA loan programs," says Michael T. Zenk, President of Venture Bank. Venture Bank was founded in 2001. They currently maintain three locations in Bloomington, Golden Valley and Eagan. Venture Bank is one of Minnesota’s most active SBA lenders.

Since the signing of ARRA, SBA’s loan products have made a significant impact throughout the State with weekly increases in loan dollar volume. To date, SBA has supported $337.4 million dollars in small business lending to over 1,000 Minnesota small businesses.

DEED honors Cass County EDC

The Bemidji Pioneer notes that the Cass County Economic Development Corporation has been recognized by the Minnesota Department of Employment and Economic Development in its 2008 Annual Report for the Cass County EDC’s work on the Chase on the Lake redevelopment project.

Excellent recognition of the work of Ms. Gail Leverson, MnSBDC Professional Business Consultant and Executive Director of the Cass County EDC working with Chase on the Lake redevelopment project.

http://www.bemidjipioneer.com/event/article/id/100011419/

“Partnerships with county and regional economic development organizations like the Cass County Economic Development Corporation are key to the success of the Small Business Development Centers,” said Greg Bergman, regional director of the SBDC at Central Lakes College. “Having someone experienced and knowledgeable within the county adds a lot of value to the services we provide on a regional basis.”

The EDC is a satellite center of the North Central Minnesota SBDC in Brainerd. Through this partnership, the EDC offers counseling to relocating, expanding or new businesses in Cass County. The EDC is a local nonprofit corporation created to assist with job creation and capital investment throughout Cass County.