Marketing: Do You Belong to A Trade Association?

The Benefits of Networking

Many of us get so involved in our day to day responsibilities managing our business that we fail to take the time to utilize the various networking tools available. There is a lot of discussion on line about social networking: Twitter, Facebook, Plaxo, Linked-In are used by many to connect to clients and peers. But, do you currently belong to a trade association? This is a very important network consisting of like kinds of businesses.

The value in belonging provides several opportunities:
1. Your industry may be faced with different challenges and the ability to discuss common problems and potential solutions with your peers may provide insights that you haven’t thought about.
2. The opportunity to partner with others in business opportunities.
3. The educational opportunities to increase your knowledge.

The ability to stay current and to be “on top of your game” is increasingly important in a fluid market place and trade associations and their networks can be an important part of your business plan.

Continued Success!

Steve Bloom, SCORE Atlanta
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Finance: Is The Money Available?

Funding Your Business

In my continuing quest to receive input on whether the market has embraced the financing initiaitives that the SBA has created, it seems getting banks to participate is an on going challenge. I’ve attached a copy of correspondence between a reader of this blog and myself that validates the current “state of affairs.”

“Hi Steven I left a comment on your blog about the Arc loan program. It is one of few that even mention anything about it. I myself am disheartened about the whole program. I was very disappointed in what the Arc loan program has become. It was a great idea that is now in the hands of banks and has gone no where.
I myself have a small business for the last 8 years and I am ashamed and appalled that this great program wasn’t able to become a success story.
I have been selling my product to local businesses around the Country all this time. I like other small businesses around the Country are what made this great Country. So to see us small businesses overlooked like this is sad. Thanks for touching on this subject.
My other question is that I wanted to know how I would go about creating some sort of Union for Small Businesses. I feel there is no voice for us as a whole. We need to have our words heard.
Any thoughts or ideas would be greatly appreciated

And my response: “thanks for your e mail regarding the failure of ARC this year. I posted last week a comment to your frustration on the blog and can empathize. I currently work with a client for the past 4 months to close a 15k Community Express loan. She has great credit, been in business 3 years and still is being put through a “wringer.” This is not how the program should work.

Forming a small business group to provide direct feedback in theory is a good one, but there are a number of national organizations that purport to do the same. NFIB is the largest and there are at least a dozen more. The challenge is not having programs available, there are a few good ones on the books, it’s getting banks to cooperate. Congress and/or SBA can’t force them to participate. Truth be known, small loan origination, processing, closing and administration is not profitable to banks.

Good Luck and Success for the Future.”

Keep your cards and letters coming.

Steve Bloom, SCORE Atlanta
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Finance: Challenges Revisited

Expert Answers to Your Loan Questions

I received a comment from Johnny on one of my previous blogs regarding a lack of capital available to small business. I’m always interested in your comments and experiences so please share your thoughts with the rest here on the blog or in SCORE’s online community.

Johnny’s comments are as follows:
The Arc loan program started out as a great idea and that’s it. The banks have taken this great loan idea and have done nothing. Many banks are not even involved. One of the major banks in the United States (Bank of America) always professing they are the leaders in looking out for the small business is not even involved.

I have a small business for the last 8 years. I sell my product to Boutique stores across the Country. What I do and others like me are helping to push this economy into a better place. This Country was built by small businesses and now when we need the help of banks and our government we get nothing. There is no voice for us small businesses. I am appalled and ashamed for a recovery loan program that had so much promises and potential, fizzles out in the hands of our American banks. All while our government and elected officers do nothing. This country is run by our major banks and what financial gain they can get. The small businesses are pushed aside.

And my response:
Johnny I understand your frustration and my experience is that your financing challenges are systemic. One important clarification, there are a number of new initiatives currently being formulated inside the SBA to try to provide more liquidity to the capital markets. The issue is not whether SBA understands the problem, its that solutions currently provided can not be force fed to SBA lenders. Let’s all hope that the new program upgrades will provide capital to a very important part of our GDP: SMALL BUSINESSES just like yours.

Steve Bloom, SCORE Atlanta
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Small Business: SBA Loans

SBA States Loan Volume is Increasing

I received from the SBA the following release and wanted to share with you:
September loan volume highest since August 2007

WASHINGTON – Changes under the American Recovery and Reinvestment Act to U.S. Small Business Administration loan programs led to a rebound in SBA-backed loans for small businesses and greater access to much-needed capital.

Since the Recovery Act was signed on Feb. 17, SBA has supported more than $11.3 billion in lending to small businesses through its two largest loan programs and seen its average weekly dollar volume increase by more than 60 percent in comparison to the weeks before the Recovery Act. Additionally, the average number of loans approved per week has increased by more than 50 percent. The dollar volume for September 2009 ($1.9 million) was the highest single-month total since August 2007.

This is obviously encouraging news, but my personal experience has been that banks are still NOT lending in the Atlanta market. Georgia has been faced with a number of community bank closings and lender’s underwriting has under gone significant changes. Minimum credit scores approaching 700, detailed financial statements and completed business plans are the norm.

This isn’t a “bad thing,” prudent lending practice should require strong borrowers and verifiable collateral. What is distressing is that even with strong borrowers, finding a bank to provide funds is still a challenge. One of my clients had a $475000 recent appraisal with no debt on the property and she wanted to fund a $100000 loan secured by a first mortgage to fund a business opportunity. She was turned down by 2 banks before a local credit union figured out that a 25% loan to value ratio was strong collateral for a loan even in a distressed real estate market.

I’d like to hear from you about what is happening in your area and is funding opportunities improving.

Steve Bloom, SCORE Atlanta
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Customer Service: A Lost Art?

Service is Key to Turning Prospect into a Client

I just returned from a mini vacation/business trip to SW Florida searching for distressed water front property in Ft Myers, Cape Coral area. During a four day search, I had the opportunity to converse with several realtors who are experiencing one of the worst real estate recessions in history.

One would anticipate that these professionals would be anxious to serve, educate and respond to potential buyers, but this unfortunately wasn’t the case. Maybe my expectations were too great or they perceived that I was just one of many “tire kickers” looking for opportunities that doesn’t exist. By the way their perception was accurate but providing a negative experience doesn’t lead to future referrals or opportunity.

Surprisingly, we happened on an “open house” sign and the agent was already in his car and leaving. We didn’t stop and continued driving. He caught up to us and asked if we’d like to see the home. We said that would be appreciated and was impressed with his enthusiasm. Within a few moments, realized that the home, new construction, with deep water access and a dock was over priced and not attractive. As we were leaving the realtor started asking questions and we informed him we had provided our name to another realtor and that individual was going to provide information to us the next day. He offered to share his 10 years of experience and insights to the current market and wanted to show us a couple of other homes in the area. It was 5:30 PM on a Saturday evening, he knew we were doing our initial market research and weren’t buying this trip, but he was willing to provide the time and to educate us.

His follow up the next few days persuaded us, we found the professional we were seeking to guide and educate us in a fluid market. We have already recommended him to a friend and he has a client for life.

Customer service is an art and we were fortunate to identify a small business man who understood the importance of providing value and service.

Continued success!

Steve Bloom, SCORE Atlanta
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Government Grants: Fact or Fiction

Small Biz & Government Grants

It never fails, when unemployment rises, media stories report on troubled economic times and many folks are stressed, the opportunists surface and proclaim to provide information on how we all can benefit from government programs.

One of our SCORE counselors recently was in Richmond, Va and was staying at the Sheraton Hotel and noticed that National Grants Conference was holding a “free” seminar on how to access government money.

I need to qualify my comments, I wasn’t present at the seminar, I have never attended their seminars but as a SCORE counselor, I have on numerous occasions been asked by clients where they can receive money from our government.

If you Google National Grants Conference you will see many comments, mostly negative, pertaining to this company. My experience suggests there is no “free lunch” for small business to access government largess, and I have never been involved nor have I heard of grant money being available for small business in my 30 years as a mortgage banker and 10 years as a SCORE counselor.

Having said that, yes grant monies are available and if you link to www.sba.gov and search for grants there is a one line descriptive that supports my comments.

If you have a cure for a major disease or work with our Department of Defense or have the knowledge and education and experience to provide world changing processes; grants may be in your future. If your skills and experiences are comparable to mine, then free money isn’t in your future and “buyer beware!”

Continued Success,

Steve Bloom, SCORE Atlanta
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Finance: Continued Frustration With ARC

SBA Loans

I wanted to share a comment that I recently received from a reader and an alternative financing tool that might help some of you who are car, rv or boat dealers.

Steve, I own a small used car dealership, I’ve in business for 16 years. Recent economic times as well as the clunker program have really put a strain on the business. I have several lines of credit (all current) but not for long. I contacted every lender on the SBA website and all declined to participate in the ARC loan program for the reasons you stated above. Do you think it would be worth my while to contact my local congressman?

Thanks,
Paul

Paul, you certainly can share your frustration with your Congressman, but SBA guaranteed loans through approved lenders is strictly free market based. SBA or Congress can’t mandate lenders to participate and as I have previously discussed, ARC is expensive to originate and not profitable to banks. The information you have provided might suggest with an excellent business plan and fair credit score, you might want to explore the dealer loan program that I blogged about a couple of months ago. Information can be found at: http://www.sba.gov/floorplanfinancing/index.”

Every loan request is different and I urge all of you to contact your local SCORE office and meet with a counselor who can review your situation and refer you to one of our very knowledgeable volunteers.

I do appreciate feed back like Paul has shared and encourage this type of dialogue on the blog.

Continued Success,

Steve Bloom, SCORE Atlanta
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Marketing: Do You Belong To A Trade Association?

Learn Real Trade Association Benefits

The power of social networking has been discussed by many in growing our networks and business opportunities. One important and time tested opportunity that small business sometimes over looks, is joining a trade association specific to your business.

Why take time out of your busy schedule to participate in another group? Because you can’t afford not to!! A trade group is a collection of industry leaders who are intimately involved in providing timely information specific to your business. They understand the challenges you face and more important, some of the solutions that will work in solving common problems.

They are aware of trends, government action and technology that can deter or benefit your industry and equally important, it provides opportunity to establish friendships with others doing what you do. Yes, they are competitors, but who best to recommend you to others if the job is too small or they’re not capable of performing the work, than a respected competitor.

In my former business as a mortgage banker, I belonged to the Mortgage Bankers Association and was active in a small sub-group that specialized in HUD insured apartment financing. The knowledge gained annually, the contacts made. the business opportunities offered and the warnings provided pertaining to future potential challenges were invaluable.

People do business with people and getting involved with like minded business people can only benefit your business. Google trade association for your type of business today and explore what becoming a member can do for you.

Continued Success!

Steve Bloom, SCORE Atlanta
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Finance: Recovery Act Expands Micro Loans

New Intermediaries Will Expand Access to Loans for Small Business

The following news release was made on Wednesday and with new micro lenders on board and a shift in SBA’s funding allocation, access to capital should improve:

“With the American Recovery and Reinvestment Act funding an additional $50 million for loans and $24 million for technical assistance, the U.S. Small Business Administration is expanding its Microloan program and increasing access to capital for small businesses across the country.

The program is shifting to funding provided under the Recovery Act now that it has exhausted the regular FY 2009 appropriations for $20 million in loans and $20 million in technical assistance.

With the additional resources, SBA is focused on adding new lenders and encouraging entrepreneurs to seek out SBA-backed microlenders to finance their businesses.

“SBA’s Microloan program provides a critical source of capital for entrepreneurs, including women, low-income individuals and minorities, who often have difficulty obtaining capital to start and grow their businesses,” said SBA Administrator Karen G. Mills. “With these resources, we can put more entrepreneurs and small business owners in a position to succeed and create jobs that will in turn help drive our nation’s economic recovery.”

Since the Recovery Act, SBA has approved eight new applications from lenders to join the Microloan program, and has 15 new loans to microlenders for $10.7 million in Recovery Act funds ready to be disbursed. Of the 15, eight are for new microlenders.

The approved new microlenders are: Vermont Community Loan Fund, Inc. of Montpellier, Vt; Neighborhood Development Center of Saint Paul, Minn.; Cen-Tex Certified Development Corp. of Austin, Texas; The Emperor Organization of Tallahassee, Fla.; Staunton Creative Community Fund, Inc. of Staunton, Va.; Lane MicroBusiness (d.b.a. Dev) of Eugene, Ohio; FINANTA (American Street Financial Ser.) of Philadelphia, Pa; and Accion USA, Inc. of New York, N.Y.

SBA’s Microloan Program supports microlenders by providing them with up to $3.5 million in low-cost loans from SBA to finance their lending to small businesses. SBA’s interest rate to microlenders is based on the five-year Treasury rate, with adjustments tied to a microlender’s average loan size. Microlenders use the SBA funding to provide loans of up to $35,000 to entrepreneurs, which can be used for working capital and acquisition of materials, supplies, furniture, fixtures and equipment.

SBA also provides grant funding to microlenders to finance technical assistance and counseling programs for their borrowers, including staff, classroom training and occupancy costs. SBA’s reimbursement is capped at 25 percent of the microlender’s outstanding SBA loan portfolio.

Entrepreneurs who wish to learn about the Microloan program can visit: http://www.sba.gov/services/financialassistance/sbaloantopics/microloans/index.html”

Please share your experiences as you apply for these type of loans.

Continued Success!

Steve Bloom, SCORE Atlanta
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Finance: Update on ARC Loans

Adding Personnel With Minimum Risk

Banks are stil not participating in ARC loans as was recently written in a recent article in Business Week: “SBA’s new America’s Recovery Capital Loan Program loans, which are emergency loans capped at $35,000 with a 100% guarantee and 0% interest, banks have taken a wait-and-see approach. During the program’s first month, 180 banks originated 371 loans worth $12 million. Mills says the program, which received $255 million of stimulus money, aims to help about 10,000 businesses eventually. But Robert Seiwert, senior vice-president at the American Bankers Assn.’s Center for Commercial Lending & Business Banking, says many bankers aren’t interested, even with the full guarantee. “Those loans are attracting borrowers with a high credit-risk profile at a time when regulators are clamping down,” he says. “Bankers are not eager to add to the delinquency numbers of their portfolio.”

I also had an opportunity to counsel a growing small business who has a need for administrative staff, but is fearful to take on additional labor costs in an unpredictable market place. I suggested she use a temporary employment agency in the interim. The costs are competitive, there is no tax reporting and liability, that is assumed by the agency and most important: you have an opportunity to “test” a future employee before hiring. The length of time you must use the agency is negotiable, but in my business I followed my own advice and after 6 months made a temp worker, fulltime.

Continued Success

Steve Bloom, SCORE Atlanta
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