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3 Things You Should Know About Small Business: April 18

Wed, 18 Apr 2012 11:44:59 EDT

NEW YORK (MainStreet) - What's happening in small business today?

1. The White House is threatening to veto a small-business tax cut. A House Republican-led bill to extend a temporary tax cut to small businesses may be vetoed by The White House after calling it an "unproductive giveaway to many of the country's most profitable companies," according to the Associated Press.

The House is expected to vote on the bill Thursday, which Republicans say will fund job creation. However, even if the bill is passed in the House, it is unlikely to be passed in the Democratic-led Senate, the AP says. ...

4 Crowdfunding Cautions for Small Businesses

Thu, 29 Mar 2012 07:45:17 EDT

NEW YORK (TheStreet) -- Small companies will soon have a new option to obtain financing through crowdfunding, but there are some cautions to consider.

The so-called crowdfunding term essentially means pooling resources or money together from a group. Under the Jumpstart Our Business Startups Act, or JOBS Act, small companies will have the ability to raise up to $1 million in equity on an annual basis through crowdfunding, without having to go through the rigorous disclosure process by the Securities and Exchange Commission.

To be sure there are a host of unknown answers regarding crowdfunding, but as more companies take to social media to tell their story and gain a following, the strategy could become a major player in the alternative financing sector. ...

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Alternative Lending Being Given a Boost

Thu, 16 Feb 2012 07:45:00 EST

NEW YORK (MainStreet) -- Even as credit starts to flow again timidly at traditional lenders, small businesses -- particularly start-up companies -- are still having trouble getting financing. Many have turned to alternative lenders. And now bigger, more recognizable names finally smell opportunity in the alternative lending space.

Small-business loan approval rates by community banks and nonbank lenders spiked in January to their highest levels in the past 12 months, according to the monthly Small Business Lending Index, which analyzes loan applications through Biz2credit.com, which connects borrowers with more than 1,100 lenders nationwide. Alternative lenders approved more than two-thirds of applications from potential borrowers last month, compared with some 11.7% at big banks, a Biz2Credit survey says.

Alternative lenders in particular -- Community Development Financial Institutions, accounts receivable financers, merchant cash advance companies, microlenders and others -- approved more than two-thirds of applications from potential borrowers last month. That compares with the approximately 47.5% of loan applications approved by small community banks and just 11.7% approved in January by banks with more than $10 billion in assets, Biz2Credit says. ...

Your Web Site Isn't Finished

Fri, 27 Jan 2012 07:30:00 EST

CHICAGO (MainStreet) -- We all love the satisfaction of a completed To Do list. So it's no surprise that once a company's Web site goes live, it gets marked off as another task accomplished and is promptly forgotten until the next redesign comes along.

But a good Web site is never really "done." If it stays relatively unchanged for months (or years!), that sends a powerful, negative message to potential customers, many of whom form their initial opinions of a company through its Web site. If that dated Web site also happens to be organized like a maze, with dead-end links and irrelevant content, those browsers might never come back. Increasingly, specialists known as information architects are being called upon by businesses to create an underlying structure that enhances ease of use for their Web sites.

Once, Web sites were a high-tech novelty. Now they are a mandatory marketing tool. If you want yours to stand out, it may be time to assess how it's really working -- from the user's perspective. Designers and developers can craft the look of a site, while writers produce its content. But increasingly, specialists known as information architects also are being called in to create an underlying structure that enhances ease of use. ...

How to Use Retirement Funds to Start a Business

Wed, 28 Dec 2011 07:45:00 EST

NEW YORK (MainStreet) -- With access to credit still tough, small-business owners sometimes need alternative sources to fund a business.

Rolling over a qualified retirement plan is a good way to inject equity into your business without penalty, says Steve Stovall, vice president of business development at Benetrends, which helps entrepreneurs and small-business owners create funding strategies for their businesses. With access to credit still tough, rolling over a qualified retirement plan is a good way to inject equity into your business without penalty.

"While the Small Business Administration says there are all types of loans available, to actually find a bank that will fund a lot of business opportunities is very different, and those actual lenders can be very few and far between. So if somebody is up against a time constraint or if someone doesn't a have a job, without creating debt or without pledging collateral activity, using the 401(k) rollover is a great way to go," Stovall says. ...

American Express Opens $100M Start-Up Fund

Wed, 09 Nov 2011 07:00:00 EST

SILICON VALLEY, Calif. (MainStreet) -- American Express plans to start with word on the street to figure out which start-ups are worthy of its investment for innovations in digital commerce.

The company could invest up to $100 million, says Harshul Sanghi, who was appointed a managing partner of the card company's Enterprise Growth Group in September. American Express plans to invest as much as $100 million in early stage companies dedicated to digital commerce.

The multiyear initiative looks to invest in companies improving on the company's loyalty and reward programs, point-of-sale technology in management and fee-based services, security and fraud detection, cloud-based services and data analysis. ...

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5 Franchises That Help With Financing

Wed, 26 Oct 2011 07:45:00 EDT

NEW YORK (MainStreet) -- A lack of capital and uncertain economy is deterring franchisees from opening locations and wreaking havoc on parent companies' growth plans. If the banks aren't doling out money, how will they ever expand and hire?

One way is for a company to take financing in-house -- whether by partnering with banks, creating financing arms to help franchisees through the lending process or securing private equity financing on more acceptable terms.

Not everyone's in love with the idea. ...

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How Even Small Businesses Can Sell in China

Fri, 30 Sep 2011 07:30:00 EDT

CHICAGO (TheStreet) -- Many large U.S. corporations have gotten through the past few years relatively unscathed thanks to international sales. While domestic customers may be holding back, those in emerging markets have propped up plenty of corporate balance sheets. And when it comes to booming overseas markets, perhaps none is as coveted as China.

While China's rapidly growing economy represents a potential windfall, its vast market of potential customers can feel out of reach for small businesses. There are, after all, plenty of hurdles to overcome before a U.S.-made product reaches a Chinese buyer, including government bureaucracy, unfamiliarity with Chinese markets beyond Beijing and Shanghai and significant language and cultural differences. The U.S. exported $45 million worth of wine to China last year, an effort boosted by the Wine Institute, a trade association for California wineries.

But thousands of small U.S. companies are selling to China, thanks to trade initiatives that encourage such cross-cultural partnerships. The key is to find a niche where having an American product is an advantage. You may never be able to beat Chinese manufacturers on price, but you can benefit from the perception that Western products represent high quality and luxury. ...

Starting a Business? Review Tax Implications

Sun, 04 Sep 2011 10:00:00 EDT

BERKELEY HEIGHTS, N.J. (TheStreet) -- New business owners often pay lip service to mundane details such as entity formation -- meaning how your business will be structured for legal and taxation purposes -- but I urge all would-be business owners to work with legal and financial professionals well-versed in the choices.

A new business can be set up as a sole proprietorship, general partnership, limited liability partnership, single-member LLC, multimember LLC, S corporation or C corporation. Selecting the right legal entity really is unique to each business and depends on the circumstances. Before starting a business, it's good to figure out what kind of business it'll be from a tax and liability perspective.

A person who starts a business without even making a choice has actually chosen to be a sole proprietor. A sole proprietorship is simple from an administrative perspective and does not require the services of an attorney to form, but generally makes sense only in the simplest of circumstances. The downside is you have unlimited exposure to business problems on a personal level. For tax purposes, an owner reports the tax results on their personal income tax return on IRS Schedule C and typically needs to make quarterly estimated personal income tax payments. In addition, the sole proprietor pays self-employment taxes (FICA) calculated on his or her self-employment income when filing an annual tax return. If the sole proprietor has W-2 employees, payroll taxes and withholdings are handled like any other business entity. ...

'Invoice Discounting' Offers Firms Quick Cash

Thu, 01 Sep 2011 08:00:00 EDT

BETHESDA, Md. (MainStreet) -- It's well-known by now that the down economy has strapped a number of small businesses seeking financing. With banks reluctant to lend, particularly to newer companies or to those needing the smallest of loans, these businesses are seeking funding alternatives.

The smallest businesses have limited options for quick cash, though. Two options growing in popularity include peer lending and pawning small valuables. Another option is a form of factoring called invoice discounting. The down economy has led more small businesses to turn to invoice discounting, a form of factoring, for cash-flow assistance.

Interface Financial Group provides funding to small businesses through invoice discounting. The 39-year-old franchised company, which operates in seven countries, says it has seen demand for its services grow exponentially recently as a result of the economy. ...

Small-Firm Hiring Drops in August

Tue, 30 Aug 2011 14:52:09 EDT

MOUNTAIN VIEW, Calif. (MainStreet) -- Businesses with fewer than 20 employees hired fewer employees this month, while current employees worked less hours and were paid fewer dollars.

The nation's smallest businesses created just 35,000 jobs during the four-week period ending Aug. 23, according to Intuit's Small Business Employment Index released Monday. After optimism rose in July, small-business hiring fell this month, according to an Intuit index.

The August numbers are a reversal from a positive reading in July, where small firms added 40,000 jobs (revised downward from Intuit's original estimates of 50,000). July also saw an uptick in hours worked by employees and overall compensation for the month. ...

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Online Pawn Shop Becomes Short-Term Option

Fri, 26 Aug 2011 07:30:00 EDT

NEW YORK (MainStreet) -- Pawning dad's gold watch or grandma's broach may not be the first thing that comes to mind when seeking financing for a business, but a growing number of small-business owners are turning to this option because of a lack of financing available elsewhere.

"The demand is getting stronger and stronger every day," says Todd Hills, CEO of Pawngo, an online pawn shop. "Small-business owners have a pretty direct plan: 'I need this money for X and this is how I am going to play it back.' Whereas a consumer comes to us because they've had some sort of unexpected life event happen." With the economy still struggling, more small-business owners are turning to pawning valuables to supplement cash flow. Pawngo offers an online pawn option.

The company typically accepts small valuables and jewelry such as watches and gold coins in exchange for a three- to six-month loan. ...

3 Ways the Debt Ceiling Hits Small Business

Fri, 22 Jul 2011 07:45:00 EDT

NEW YORK (TheStreet) -- The deadline for raising the debt ceiling is swiftly approaching, and while headway was made with Tuesday's so-called Gang of Six plan, created by a bipartisan group of six senators, most doubt the proposal will be passed as is.

The debt ceiling is the amount the U.S. government is allowed to borrow at any given time. It's capped at $14.3 trillion, a figure the U.S. has essentially reached. Congress needs to approve a raise to the debt ceiling by Aug. 2 or risk defaulting on debt, services and benefits for U.S. citizens. As the deadline ticks nearer for a default on U.S. debt, small-business officials find cause for hope and alarm.

Such votes occur regularly, but this year Republicans have dug in on several underlying issues, alarming economists and rating agencies such as Moody's and Standard & Poor's as the deadline ticks nearer. Of course there are also reasons for small businesses to be concerned about the default. ...

IPO Pick of the Week: Zillow

Tue, 19 Jul 2011 07:00:00 EDT

NEW YORK (TheStreet) -- Zillow may not be the biggest offering this week, but it certainly has the most buzz.

Originally, the online real estate valuation Web site planned to raise $45 million, but that has since been increased to $59 million. The price range has moved to $16-$18 per share from from $12-$14. Zillow was the third most popular site in the real estate category in May, according to Inman.com.

Investors are hoping for the same type of positive gains seen in the recent Homeaway offering, which is up 53% since going public, and IPO Desktop President Francis Gaskins says it's the pick of the week. ...

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Final Debit Interchange Fees Anger Retailers

Thu, 30 Jun 2011 16:17:54 EDT

WASHINGTON (TheStreet) -- Small-business owners expressed outrage Thursday in reaction to the Federal Reserve's final ruling on debit card interchange fees.

"It is beyond disappointing that after fighting for months to bring fairness and transparency to debit-card swipe fees in order to give hard-working Americans a much-needed break, the Fed has given in to the pandering of Wall Street," according to a statement by Dennis Lane, spokesman for Reform Swipe Fees NOW!, a Washington-based coalition formed by the Retail Industry Leaders Association that advocates on debit and credit card swipe fees.

"Today's final regulations are even more generous than the Fed's proposed rules, guaranteeing the nation's biggest banks and credit card companies a more than 400% profit per transaction," says Lane, who is also a 7-Eleven franchisee. "Take it from someone who works on an average of a 1% to 2% profit -- that is just outrageous!" ...

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