A study just released by the SBA’s Office of Advocacy shows that lending to small businesses started to ebb way back in the first half of 2008. At the same time, the number of microloans (those under $100,000) began to spike, suggesting that a lot of small-business owners responded to the loan shortage by pulling out their credit cards. That’s the depressing part. Here’s the useful part: the report includes state-by-state rankings of financial institutions’ small-business lending rates. Which means you can find the most accessible banks in your state. The rankings are here.
What’s in your wallet? It’s your banker’s hand! Turns out that, while the credit card reform bill signed by President Obama does offer help to people with a personal card, it does nothing for small entrepreneurs. The L.A. Times reports that an amendment which would have extended the bill’s provisions to cardholders whose companies have under 50 employees died for lack of support. What that means: if you have a card backed by your small business, you won’t enjoy the breaks that come with the new law: protection from hidden fees and sudden rate increases. What else that means: it’s likely you’ll soon be paying more for your card. Banks will lose billions as a result of the new law and they’ll be looking to make it up elsewhere. (Guess where they’ll go.)
Own a company (no money required). If you’re the adventurous sort, you don’t need credit–or even cash–to get your own business, writes Nolan Bushnell in a recent piece at Inc. magazine. Just take a look around and find a business that’s failing. There’s a good chance the owner will be happy to hand it over for free, Bushnell surmises, providing you can take over the lease. Interesting idea from the man who started Atari and Chuck E. Cheese. We’ll start inspecting our neighborhood tomorrow. Maybe we’ll get lucky and discover a Chuck E. Cheese where things have turned sour. (We always did think we could make a better pizza. Now’s our chance to prove it.)
What’s so funny about running a business? We put an awful lot of downbeat news in this blog. So we decided to add a new feature: Small-Business Joke of the Week. Here’s our first. One day a cafe owner in Brooklyn receives a notice in the mail from the New York State Department of Labor. They claim he’s underpaying his employees. A week later he gets a visit from an agent. “I want a list of your workers and how much you pay them,” the agent demands. “Sure,” says the owner. “There’s my cook, he gets $4,000 a month. And my two waiters, I give them $3,000 a month plus tips. And then there’s Larry. He works 18 hours a day and clears $100 a week. Plus he gets a 6-pack every night and occasionally he sleeps with my wife.” The agent sits up in his chair. “Larry! That’s the guy I want to talk to!” Replies the owner, “You’re talking to him now.”