As I travel across Northern New York and speak with many business leaders, I hear repeatedly about the need for economic development policies that support sustainable, market-driven small business expansion. One such federal agency, the well-known, yet often under-utilized Export-Import Bank is particularly well equipped to implement such policies so that U.S. companies may grow by accessing new export markets. [Read more...]
In today’s financial climate banks have cash reserves available for lending to small businesses. But that does not necessarily mean a bank is willing to take 100 percent of the risk in a loan to a business. Regulatory agencies would not approve. Therefore, banks have tools available to reduce their risk when lending to businesses. Here are a few of the most popular examples:
The U.S. Small Business Administration 7(a) Loan Program is one of the most popular with banks. Depending on the size of the loan, the SBA will guarantee a portion of the loan that the bank makes to eligible borrowers. For example, if the bank loan is less than $150,000, the SBA may guarantee up to 85 percent of the loan amount. If the loan is over $150,000, then the SBA may guarantee up to 75 percent of the loan amount. The maximum bank loan amount for a SBA 7(a) loan guaranty is $5 million ($3.75 million SBA loan guaranty).
The SBA 7(a) Loan Program reduces a bank’s risk in lending to an eligible borrower. For example, if a bank commits to lend $300,000 to a business, the SBA may guarantee up to $225,000 of this loan amount. This leaves $75,000 in lending “risk” to the bank. I say “risk” because the bank will typically have collateral in the form of real estate, machinery and equipment and inventory, among other items, to secure its loan. [Read more...]
Even after working with businesses for 15 years, I still find it very interesting when I have the opportunity to review financial statements. A business’s financial statements tell a business’s story without ever speaking with the owner. That is why it is crucial for a business owner to take time preparing and learning how to read financial statements.
There are typically three types of financial statements that a business owner should be familiar with and regularly monitor: the income statement, the balance sheet and the cash flow statement. A business owner should also monitor the aging of accounts payable and accounts receivable at the same time they review their statements.
The income statement, in short, tells the story of whether a business is making or losing money. If revenues are more than expenses, there is an operating profit; if revenues are less than expenses, there is an operating loss. [Read more...]
It’s no secret that all businesses need funding. Business owners go through a variety of avenues to obtain funding and can often be met with frustration and rejection. Through personal conversations with a number of business owners, professional peers and friends, I hear over and over again that “there is no money to borrow” and that “lending institutions are not lending.” Despite these frustrations and concerns, options are available for financial assistance.
The lending environment is actually becoming increasingly competitive because institutions do have capital to lend. In today’s environment, lenders are looking for creative and beneficial ways to provide loans to businesses. The old banking adage that “cash is king” still rings true today as businesses fight to hold onto their own capital. Businesses can never have too much cash and banks want to work with businesses that have cash. With the Small Business Administration’s 504 program, businesses can access capital on favorable terms as well as help preserve some of their own cash. [Read more...]
A year ago, I reflected on the North Country Alliance’s success over the past 24 years. Today, I reflect on 25 years of providing funding and giving a voice to small businesses across the north country.
The NCA began in 1988 as a nonprofit community development organization comprised of industrial and government agencies from across Jefferson, Lewis, St. Lawrence, Clinton, Essex and Franklin counties. [Read more...]
As I read the May 2013 edition of NNY Business headlined, “Open for Business,” I am very pleased with the many successful, thriving businesses located in the north country, as well as the many new ones making our region home. Having worked with small businesses for the past 15 years, first at the Small Business Development Center at Jefferson Community College and SUNY Canton, and now for the Development Authority of the North Country, the one thing I keep coming back to as the backbone for any successful business is the business plan.
When asked to speak to an audience about starting or expanding a business, I always start with the importance of the business plan. Many people envision a business plan as a big book full of statistics and data. A true business plan, in my mind, succinctly includes all of the details that will make your business venture successful. [Read more...]
It has been nearly 30 years since the announcement was made to bring 11,000 soldiers with the newly re-activated 10th Mountain Division (L.I.) to Fort Drum. The announcement was the result of community leadership positioning the north country for the type of economic growth 11,000 soldiers and their dependents would bring to the area. Today, the continued growth at Fort Drum and in our communities can be attributed to consistent leadership in overcoming obstacles associated with growth, like having a healthy housing market.
The Workforce Development Institute is a statewide nonprofit organization with flexible regional programs. WDI began as a partner to the state AFL-CIO and local labor federations to provide workforce training and education services to regional and local unions. It has since broadened its role and its constituency to include economic and community development and business.