Business and Finance News
Discover (R) Small Business Watch
Small business confidence fell for the second month in July as a higher percentage of small business owners rated the current economy as poor and see it only getting worse, according to the Discover Small Business Watch. The index dropped to 83 in July from 86.1 in June. It has been below 83 only once since the beginning of 2010.
July Confidence Indicators:
- 58 percent of small business owners rated the economy as poor, up from 51 percent in June, while 7 percent rated the economy as excellent or good, down from 12 percent in June.
- 57 percent of small business owners said the economy is getting worse, up from 51 percent in June; 27 percent think the economy is getting better; 14 percent think it is the same; and 3 percent are not sure.
- 45 percent of small business owners report economic conditions for their businesses were worse in July, up 2 percentage points from June; while 30 percent of respondents said conditions were better; 22 percent reported conditions were the same and 3 percent weren't sure.
- In July, temporary cash flow issues declined as 49 percent of small business owners reported that their businesses did not encounter any temporary cash flow issues that caused them to hold off on paying some bills in the past 90 days, up from 45 percent in June; 47 percent did encounter cash flow issues, down 4 percentage points from the prior month.
- 28 percent of small business owners reported they will increase spending on business development over the next six months, up from 25 percent in June and the most since September 2008.
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Credit unions, community banks sparring over small businesses
By
Laylin Copelin
AMERICAN-STATESMAN STAFF
Published: 7:46 p.m. Friday, July 2, 2010
Small-business owners struggling to find credit in this economy
might do a double take: Credit unions and community banks are
fighting over them in Congress.
Credit union officials want Congress to raise the cap on the
small-business loans they can make — a move that has community
bankers crying foul.
The U.S. Senate is expected to vote on the measure as part of a
larger bill, the Small Business Lending Fund Act (HR 5297) , after
lawmakers return from the July Fourth break.
The law currently caps business loans by a credit union at 12.25
percent of a credit union's assets. The legislation would increase
that to 27.5 percent.
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Newtek Business Services, Inc. Has Joined Russell Microcap Index
NEW YORK, July 6, 2010 (GLOBE NEWSWIRE) --
Newtek Business Services, Inc. (Nasdaq:NEWT),
The Small Business Authority™, has joined the Russell Microcap®
Index when Russell Investments reconstituted its family of U.S.
equity indexes according to the preliminary list of additions posted
June 11, 2010 on
www.russell.com.
Membership in the Russell Microcap Index, which remains in place for
one year, means automatic inclusion in the appropriate growth and
value style indexes. Russell determines membership for its equity
indexes primarily by objective, market-capitalization rankings and
style attributes.
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RBC Bank: Southeastern consumer confidence jumps
The Southeast is slowly regaining
its footing from the harsh economic climate as many consumers are
regaining their faith in the economy, according to the latest
Southeastern Consumer Outlook Index published by
RBC Bank.
The Raleigh, N.C.-based bank’s consumer confidence index has been
improving relative to the record low levels in 2009 as the current
index for the Southeast jumped to 57 points. Between July and
December 2009 – during the height of the recession – the index was
31.1. And during the same time frame in 2008, the index registered
24.8.
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U.S. Chamber Supports Expansion of SBA 504 Loans
Publication Date:
15 June 2010
With banks facing even greater scrutiny and tightening their
lending, the U.S. Chamber is calling on Congress to pass a bill to
allow small businesses to refinance certain commercial real estate
loans through the Small Business Administration.
Currently, SBA 504 loans are set aside only for “business
expansion.” They are long-term, fixed-rate loans for equipment and
owner-occupied real estate but are contingent on new jobs being
created from the expansion. The Chamber is seeking to change the law
so that 504 loans can be used to refinance conventional commercial
real estate loans that are coming due.
An alarming number of commercial real estate loans with 15-to-20
year amortization terms that are renewed every 3-to-5 years are
coming due at a time when borrower’s assets have devalued, according
to the Chamber’s Executive Vice President of Government Affairs
Bruce Josten. “Even though the small business borrower may be
current on the payments, the financial institution with tightened
lending standards and increased oversight by examiners may not have
a choice but to either force the business into foreclosure or take a
loss by writing down the loan,” Josten says.
Rep. Melissa Bean (D-IL) has introduced legislation that would allow
small businesses to refinance their commercial real estate loans
with a 504 loan, at no expense to tax payers. The bill would also
raise the maximum SBA 504 loan size from $1.5 million to $5 million
and from $4 million to $5.5 million for small manufacturers. The
legislation would require that borrowers be current on payments and
that refinance loans apply only to owner-occupied commercial real
estate, buildings, or equipment.
The idea has the support of the Obama Administration. “Healthy small
businesses shouldn’t be forced to close their doors just because
they can’t find refinancing. We can help them avoid foreclosure and
continue creating jobs by temporarily opening up SBA’s 504 program,”
SBA Administrator Karen Mills said during a National Small Business
Week speech in Washington DC on May 24, 2010.
News Release
ETA News Release: [03/29/2010]
Contact Name: Mike Trupo or Lina Garcia
Phone Number: (202) 693-3414 or x4661
Release Number: 10-0387-NAT
US Department of
Labor announces $1.7 million grant to assist workers in southwest
Alabama
WASHINGTON — The U.S. Department of
Labor today announced a $1,700,000 grant to assist approximately 319
workers affected by documented and projected layoffs from multiple
companies in a defined regional economy in the southwest portion of
Alabama. The region is comprised of Baldwin, Choctaw, Clarke,
Conecuh, Escambia, Mobile, Monroe and Washington counties.
"Job creation and economic recovery are this administration's top
priorities. We recognize that those goals will not be realized until
workers who have been laid off, or who are facing layoffs, are able
to quickly gain the skills they need to enter good jobs — the kind
that offer real stability and opportunities for advancement," said
Secretary of Labor Hilda L. Solis.
Awarded to the Alabama Department of Economic and Community Affairs,
this grant will be operated by the Alabama Workforce Investment Area
and Mobile Works Inc. A key focus of the grant will be targeting
workers in this region affected by manufacturing and lumber industry
layoffs for training to transition them to growing areas of the
regional economy, including aerospace, construction, health care,
industrial maintenance, maritime and steel manufacturing.
In addition to serving individuals who already have been laid off,
this Regional Economic Impact National Emergency Grant will provide
the state with the flexibility to serve workers affected by
projected layoffs occurring within this region during the grant's
12-month period of performance.
Of the $1.7 million announced today, $867,015 will be released
initially. Additional funding up to the amount approved will be made
available as the state demonstrates a continued need for assistance.
The amount released today will be funded by resources made available
for National Emergency Grants under the American Recovery and
Reinvestment Act of 2009.
National Emergency Grants are part of the secretary of labor's
discretionary fund and are awarded based on a state's ability to
meet specific guidelines. For more information, visit
http://www.doleta.gov/NEG.
SBA Warns Small Businesses of Fraudulent Attempts Offering to Help Them Secure SBA Loans
WASHINGTON - The U.S.
Small Business Administration (SBA) is warning
small businesses to use caution if they are contacted by firms
offering to
help them apply for funds available through SBA programs.
SBA and SBA's Office of the Inspector General (SBA OIG) have
received
several complaints from small businesses about abusive marketing
practices, scams, and exorbitant fees charged by firms offering to
help them obtain a loan, grant, or other federal funds, from SBA.
Some of these complaints include:
* Firms charging small businesses high fees to provide assistance
applying to SBA funding programs. Some firms allegedly
guaranteed that the small
business would obtain SBA funding if they paid the fee. SBA
does not
endorse or give preference to specific private companies or their
clients.
* Firms charging small businesses for services never requested after
the
small business gave bank account and routing information to a caller
claiming
to be a firm offering assistance. SBA recommends that small
businesses never
provide social security numbers, bank account information, or credit
card
numbers to anyone; and, never over the telephone.
* Firms alleging that a small business would be issued a "forfeiture
letter" that would make the small business ineligible for any SBA
funding for three years if the small business refused to use the
firm's services.
When electing to use a third party to apply for SBA funding
programs,
small businesses should also bear in mind:
* Small businesses can get free assistance in person or by calling
one
of SBA's 68 District Offices and from information on SBA's Web site
(www.sba.gov).
They can also get assistance from Small Business Development
Centers,
Women's Business Centers, Veterans Business Outreach Centers and
SCORE
Chapters, either free or for a reasonable fee. Location and contact
information for the centers can be found on SBA's Web site.
* Small businesses should ask for references and confer with trusted
colleagues and institutions, such as the Better Business Bureau,
when
selecting service providers.
* Small businesses should clearly establish and document: 1)
What they
are being charged; 2) When they will be charged; 3) What they must
do; and
4) What services they will receive.
SBA's Office of the Inspector General will investigate and respond
to
all complaints. SBA encourages anyone with knowledge of a
misrepresentation
regarding SBA Business Loan Programs, or any other SBA program, to
contact SBA OIG by calling the OIG Hotline toll-free at (800)
767-0385, orsubmitting an online report at the SBA OIG Web page
(www.sba.gov/ig), and click the link for "Report Fraud Waste or
Abuse."
SBA Recovery Lending Extended Through April 30
Administrator Mills urges longer-term extension for successful programs
WASHINGTON –
President Barack Obama signed on Friday legislation extending
through April the U.S. Small Business Administration’s ability to
provide enhancements in its two largest small business loan
programs. The enhancements, first made available under the American
Recovery and Reinvestment Act, include a higher guarantee on some
SBA-backed loans and fee relief.
The SBA estimates the $40 million extension will support about $1.4
billion in small business lending.
“Thousands of small businesses across the country have taken
advantage of these Recovery loan enhancements to get the capital
they need during these tough economic times,” said SBA Administrator
Karen Mills. “The increased guarantee and reduced fees on SBA
loans helped put more than $23 billion into the hands of small
business owners and brought more than 1,100 lenders back to SBA loan
programs. As a result, average weekly loan approvals by SBA
have climbed by 86 percent compared to the weekly average before
passage of the Recovery Act. These programs have been
successful in helping jump-start our economy, which is why we will
continue to work with Congress on a longer extension of the
increased guarantee and reduced fees.
“Additionally, we continue to encourage the Congress to act on other
proposals the President has put forward, including higher SBA loan
limits and refinancing for commercial property mortgages to help
thousands of small businesses avoid potential foreclosure. Small
businesses need the changes the President has called for to ensure
that they have the tools to drive economic growth and create jobs in
communities all across the country.”
As part of the Recovery Act enacted on Feb. 17, 2009, SBA received
$730 million to help small businesses, including $375 million to
increase the SBA guarantee on 7(a) loans to 90 percent and to waive
borrower fees on most 7(a) and 504 loans. The funds for these
programs were exhausted on Nov. 23, 2009, and an additional $125
million was provided in December. Those funds were exhausted
in late February, 2010, and an additional $60 million was provided
subsequently. That funding was exhausted late Friday.
Under the new extension SBA may continue to waive loan fees and
provide higher guarantee levels on 7(a) loans through April, 30,
2010, or until the funds provided under the bill are exhausted.
When the funds provided for March were exhausted, SBA reactivated
the Recovery Loan Queue, as occurred in November and again in
February, to cover the brief period of time before the funds from
the extension become available, which should be within a few days.
Eligible small business loan applicants, in consultation with their
lenders, may choose to be placed in the queue for possible approval
of a Recovery Act loan when funding becomes available.
For non-Recovery Act 7(a) or 504 loans already funded during the
Recovery Loan Queue period, this extension does not provide a
retroactive guarantee or fee relief. Loans that were funded
under non-Recovery Act terms cannot be canceled and resubmitted to
take advantage of the Recovery Act extension provisions.
This extension does not affect other SBA Recovery Act programs,
including the America’s Recovery Capital (ARC) loan program or the
agency’s microloans. Recovery Act funding still remains available
for both of those programs.
Press Release
Release Date: March 23, 2010
For immediate release
The Federal Reserve Board on Tuesday announced final rules to
restrict the fees and expiration dates that may apply to gift cards.
The rules protect consumers from certain unexpected costs and
require that gift card terms and conditions be clearly stated.
The final rules prohibit dormancy, inactivity, and service fees on
gift cards unless: (1) the consumer has not used the certificate or
card for at least one year; (2) no more than one such fee is charged
per month; and (3) the consumer is given clear and conspicuous
disclosures about the fees. Expiration dates for funds underlying
gift cards must be at least five years after the date of issuance,
or five years after the date when funds were last loaded.
The Board's rules generally cover retail gift cards, which can be
used to buy goods or services at a single merchant or affiliated
group of merchants, and network-branded gift cards, which are
redeemable at any merchant that accepts the card brand.
The final rules are issued under Regulation E to implement the gift
card provisions in the Credit Card Accountability Responsibility and
Disclosure Act of 2009.
The notice that will be published in the Federal Register is
attached. The final rules are effective August 22, 2010.
Highlights of the Final Gift
Card Rules PDF
