small business
Banks Ease Small Business Lending Standards
Thursday, August 19th, 2010 | consulting | No Comments
Banks have begun to loosen their credit standards for the first time since 2006, according to the latest survey by the Federal Reserve. The quarterly survey of senior loan officers indicated a slight easing of credit standards and most terms on commercial and industrial loans to firms of all sizes. This is the first survey since late 2006 to show an easing of standards on loans to small firms.
The survey respondents pointed to increased competition in various loan categories as a reason for the easing. Demand for such loans among firms of all sizes changed little last quarter after having dropped in the April reporting period. In contrast, credit card loan standards tightened slightly.
Locally, we are hearing that banks are increasingly flexible and more aggressive in working with their clients to create lending packages that are good fits. This is a welcome change from the last two to three years, when lenders were dealing with their own recession-related problems. While some banks are still wrestling with their loan portfolios, others appear to have worked through their issues. They now are devoting more resources to serving existing clients and attracting new ones.
This is good news for companies that need credit to keep their operations moving forward. For businesses that are in a position to take advantage of opportunities amid the carnage of the recession, many banks are more willing now to lend their support.
How do you think of yourself as the CEO?
Thursday, August 5th, 2010 | consulting | No Comments
How do you think of yourself as the CEO? A shift in perspective from functional to visionary can transform your company. Here is some food for thought about your identity as the CEO of your company. This post by Dr. Linne Bourget on the Startup Growth Expert website suggests a shift in your perspective from dealing with individual issues to focusing on the company as a whole. This can change not only your approach to running your company, but the entire culture of the company from top to bottom. Dr. Bourget says, “Your entire business derives from your identity as a CEO—or lack thereof.”
Sometimes it’s difficult to gain that perspective on your own. That’s where a trusted advisor can help. Fresh eyes on the company with what Van calls a “10,000 foot view” can help you develop a big-picture focus on the company that will pull you out of the micro-management mentality and aid strategic planning. This approach will then enable you to focus your resources and your team better to make your company more profitable.
DOE hosts Veterans Business Conference
Monday, August 2nd, 2010 | consulting | No Comments
The Department of Energy’s Y-12 complex is hosting a free Veterans Business Conference on August 3, 2010 to support veteran-owned businesses seeking to work with government agencies. As we are a veteran-owned business, we will be attending the conference. We will be listening to small business owners and seeking ways to help them do business better, whether their revenue comes from government agencies and contractors or from the private sector. Here is the link to learn more and register.
Understanding client expectations and establishing service standards
Tuesday, July 27th, 2010 | consulting | No Comments
No matter what kind of business you are running, effective communication with your customer or client is vital. You will have happy clients if you exceed their expectations, but how do you make sure that happens every time? You start by finding out what they expect. Then you can continue the relationship so that those expecxtations are met or exceeded. During the transaction process from the initial encounter to the final phase, effective communication is the key to managing client expectations and establishing service standards.
This blog post talks about the importance of listening to your client first to learn what is expected of you. Only then can you tailor your offering to your client’s specific needs. By communicating how you will meet those needs from the beginning, and then telling your client what you are doing throughout the process, your client will understand the process better and see the value in what you do.
We have built our firm on the principles of understanding our clients first, then determining how best to help them achieve the goals they set. By communicating openly along the way, we can work together to build on success. By going beyond the traditional approach of delivering the expected end result, our long-term relationships can enhance the success of our clients.
How can we exceed your expectations? We’ll be happy to listen to you.
Net operating loss carryback deadlines loom
Thursday, July 15th, 2010 | tax | No Comments
If your business suffered a net operating loss (NOL) in 2008 or 2009 (or a 2007 fiscal year), you may elect to carry back that loss up to 5 years and recover taxes previously paid. You must make the election on a timely filed return, including extensions. The deadline for electing the extended net operating loss carryback is September 15, 2010 for calendar-year corporations. It is October 15, 2010 for individuals. If you do not elect to apply the extended carryback, the original two-year carryback rule applies. In either case, any unused loss may be carried forward up to 20 years. Complicated enough yet? It gets worse - and better.
Here’s the better part: The original extended NOL carryback provision, part of the American Reinvestment and Recovery Act (ARRA) of 2009, applied only to an ‘eligible small business’ (under $15 million average gross receipts). The Worker, Home Ownership, and Business Assistance Act (WHOBA) of 2009 allows taxpayers of any size to make the election.
The other better part: The extended carryback election is generally available for only one of the tax years ending after 2007 and beginning before 2010. However, if you already made a timely election under the provisions of the ARRA, you may make an additional election for another year’s NOL under WHOBA. Even if you have already timely filed your 2009 return, you may be able to make the election before the extended deadlines.
The worse part: These rules are extremely complicated, so you need the help of a professional who is familiar with them.
By applying a net operating loss to profitable tax years, you can give your company a cash stimulus through a refund of previously paid taxes.
Payroll tax credit
Wednesday, July 7th, 2010 | tax | No Comments
It is time to prepare your second quarter payroll tax returns, due August 2, 2010 (July 31 falls on Saturday). If your company or tax-exempt organization has hired employees this year, you may be eligible for the HIRE Act new hire tax credit. You should check before filing Form 941. We previously posted about this and other tax credits in the spring.
Here is a checklist (but consult your tax adviser for specifics related to your situation):
- Was the new worker hired to fill a new position, or to replace someone who quit voluntarily or who was terminated for cause? The new worker may not be related to you or to another owner of the business.
- Was he/she hired after February 3, 2010, and before January 1, 2011?
- Did he/she work less than 40 hours during the 60 days ending on the hire date?
- Did he/she sign and give you the required Form W-11 certifying these facts? (Do not send this form to the IRS.)
If all of the above conditions are met, you qualify for an exemption of 6.2% (the employer share of Social Security tax) of wages paid between March 19 and December 31, 2010. This reduces the amount of your tax deposits for this year. It does not affect amounts withheld from the employee’s pay.
Form 941 has been modified to report wages to qualified employees starting with the second quarter. The IRS has provided more information in the instructions to the forms, and in a question-and-answer format at their website.
Small business lending changes
Thursday, June 24th, 2010 | consulting | No Comments
The financial reform bills currently in Congress are being reconciled in conference in hopes of passage by July 4. Also in the works is an appropriation of $30 billion for banks to lend to small businesses. But will small businesses see that money? Is that what they need to survive the recession? The metrics to answer these questions, and thereby allow Congress to craft legislation that does what it intends, range from hazy to nonexistent, according to this report from Bloomberg BusinessWeek. Bank data indicate that while overall lending fell over the past two years, lending to small businesses fell more than twice as much. Because banks are not required to report small business lending in detail, no one can tell whether the reason is the banks’ unwillingness to lend, the companies’ poor creditworthiness, or a lack of demand for small business loans.
We are hearing now from some banks (not all) that they have money to lend to creditworthy companies with good histories and solid plans for using the money (such as commercial real estate with leases already in place). Their credit analysts are beginning to listen again to the stories behind the numbers rather than focusing solely on whather the loans will pass muster with the regulators. We are also hearing from business owners who would much rather have more revenue than more borrowed money that they are not sure they can pay back in the current economy.
Those business owners who are applying for commercial credit are finding a higher level of scrutiny into their personal financial hstory, as this article explains. Because small business loans are often granted subject to the personal guarantee of the owner, lenders are placing greater emphasis on subjective measures relating to the owner’s character. They are going back to the old days when the banker’s mantra was, get to know your client as a person before you decide whether to extend the loan. These days, they have plenty of ways to quantify creditworthiness, but that one-to-one relationship is becoming important again.
If you are considering applying for credit, here are some things to remember:
- Deal with a banker who knows you (let’s hope you’ve already been working on this one).
- Work up a detailed plan for how you will use the money and how this use will increase your capacity to pay back the loan.
- Have your business and personal financial ducks in a row. Check your credit reports and make sure they are accurate.
- Organize your tax returns and other financial information so your lender has a complete, easy-to-follow set of data.
- Try to anticipate the lender’s questions and concerns so you can respond without being caught off guard and convey the sense that you are aware and in control.
Fraud protection resource
Monday, June 21st, 2010 | consulting | 1 Comment
When times get tough, more people try imaginative (and illegal) ways to outsmart the system or take advantage of others. We’ve seen it during this recession in Ponzi schemes (e.g., Madoff and Bolze), unemployment insurance fraud, bank fraud, mortgage fraud, and more. Recently, the Federal government set up the interagency Financial Fraud Enforcement Tax Force to improve enforcement actions and to help us protect ourselves from fraud. They launched the website StopFraud.gov as a central point for news and information on financial fraud.
As consumers and as business owners, we need protective measures to reduce our risk of becoming fraud victims. You may find some useful information on this website. For more specific help in boosting your fraud protection, please feel free to contact us.
Business Tax Audit Tips
Tuesday, March 16th, 2010 | tax | No Comments
A letter or visit from the IRS can be a traumatic event. It’s important to react calmly, stay in control of the situation, and call a professional you trust (us, for example) immediately. The IRS relies on its intimidating reputation, but you have rights and they have restrictions. We commented on this tax audit story on The Street.com.
Four ways to beat bigger competitors
Wednesday, February 10th, 2010 | consulting | 1 Comment
We commented on this blog post at an interesting site called Small Biz Survival, the rural and small town business resource. It offers some good tips for beating back larger competitors.