Purchase Order Financing

Since the 'Big Banks' have reduced lending to small businesses, they have turned to alternative means to raise funds. In addition to credit cards (credit lines reduced by the same Big Banks), pawnshops and 'payday' lenders, small business owners are discovering 'purchase order financing'. Similar to 'factoring' where a firm sells its invoice (at a discount) to raise quick cash, purchase order financing are guarantees, written by the buyer, that they are committed to purchase a product. Useful especially with off-shore manufacturing, the business owner would typically pay the factory to manufacture the goods, but in purchase order financing, the money firm instead pays to have the finished products shipped from the factory. Once the money firm is paid, they take their cut and gives the balance to the small business owner.

Why has this form of expensive financing gained popularity? The inability of small businesses to borrow from the lending institutions they use to reliably borrow from, prior to the current economic downturn.

Here's the latest report by the US Treasury that tracks this downturn in lending.

Here's a news story from the New York Times that lists this trend in more detail.

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

2010 Budget provides $113 million to support Small Business Development Centers

The 2010 budget provides funding to continue SBDC operations, and additional funds to help small businesses in America in a number of ways.

Click here for a summary of the funding impacts prepared by the US SBA.

Senators Landrieu & Snowe Introduce Bill to Create Jobs and Increase Small Business Lending

The US Senate Committee on Small Business and Entrepreneurship Chair Mary Landrieu, (D-La.), and Ranking Member Olympia J. Snowe, (R-Maine), introduced legislation to increase access to capital for small businesses and help create jobs. S. 2869, the "Small Business Job Creation and Access to Capital Act of 2009" would increase the small business loan limit to as high as $5.5 million and extend for a year the fee eliminations and increased guarantee set to expire under the Recovery Act.

Key Points;

Specifically, the "Small Business Job Creation and Access to Capital Act of 2009" would:

* Increase the loan limit on 7(a) loans from $2 million to $5 million;
* Increase the loan limit on 504 loans from $1.5 million to $5.5 million;
* Increase the loan limit on microloans from $35,000 to $50,000 and increase the maximum loan made to a microloan intermediary from $3.5 million to $5 million;
* Allow the 504 loan program to refinance short-term commercial real estate debt into, long-term, fixed rate loans;
* Extend the authorization to provide 90 percent guarantees on 7(a) loans and fee elimination for borrowers on 7(a) and 504 loans through December 31, 2010; and
* Direct the SBA to create a website where small businesses can identify lenders in their communities.

Read the full story here.

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 ARC Loan Update

Here's a quick snapshot of the impact of the US SBA ARC Loans, listed by US SBA Regions and also a 'Fact Sheet' on the impact of the ARC loans. The MnSBDC is located in Region 5.

Click here for Fact Sheet

Click here for a Snapshot Graphic

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