Resources

U.S. Small Business Administration (SBA) Launches New 100-Percent Guarantee ARC Loan Program to Help Struggling Businesses

Small businesses suffering financial hardship as a result of the slow economy may be eligible to receive temporary relief to keep their doors open and get their cash flow back on track through to a new loan program announced by SBA Administrator Karen G. Mills.

SBA will guarantee America’s Recovery Capital (ARC) loans. ARC loans are deferred-payment loans of up to $35,000 available to established, viable, for-profit small businesses that need short-term help to make their principal and interest payments on existing qualifying debt. ARC loans are interest-free to the borrower, 100 percent guaranteed by the SBA, and have no SBA fees associated with them.

“These ARC loans can provide the critical capital and support many small businesses need to make it through these tough economic times,” said Administrator Mills. “Together with other provisions of the Recovery Act, ARC loans will free up capital and put more money in the hands of small business owners when they need it the most. This will help viable small businesses continue to grow and thrive and create new jobs in communities across the country.”

As part of the Recovery Act, the ARC program was created as a no-interest, deferred payment loan to help small businesses that have a history of good performance, but as a result of the tough economy, are struggling to make debt payments.

ARC loans will be disbursed within a period of up to six months and will provide funds to be used for payments of principal and interest for existing, qualifying small business debt including mortgages, term and revolving lines of credit, capital leases, credit card obligations and notes payable to vendors, suppliers and utilities. Repayment will not begin until 12 months after the final disbursement. Borrowers don’t have to pay interest on ARC loans. After the 12-month deferral period, borrowers will pay back the loan principal over a period of five years.

ARC loans will be made by commercial lenders, not SBA directly. For more information on ARC loans, visit www.sba.gov.

 

Strong dollar has little effect on small retailers, larger effect on wholesalers

A strong dollar (making imports cheaper and exporting more difficult) appears to have little effect on the survival rate of small retailers, according to a study released by the Office of Advocacy of the U.S. Small Business Administration. The study covers 15 years of data, from 1990 through 2005, from the U.S. Census Bureau’s Statistics of U.S. Businesses and other sources.

On the other hand, the study’s authors found that real exchange rate appreciation lead to increased rates of small firm exit in the wholesale sector. In wholesale firms with more than 10 employees, a 10 percent real dollar appreciation leads to a roughly 20 percent increase in firm closures. This finding suggests that wholesalers are closely tied to domestic manufacturers, and find it hard to switch suppliers to take advantage of falling import prices.

“For many people, the idea of currency exchange rates has no relevance other than how far their dollars will go while on vacation,” said Shawne McGibbon, Acting Chief Counsel for Advocacy. “But it is of vital importance to the owners and employees of small wholesalers. Policy makers should take these concerns into account when making decisions affecting the relative strength and weakness of the dollar,” she added.

Robert M. Feinberg wrote Effects of International Competition on Small Wholesale and Retail Trade Firms with funding from the Office of Advocacy.

For more information and a complete copy of the report, visit the Office of Advocacy web site at www.sba.gov/advo.

The SBAM Small Business Champion Podcast: Big Budget Cuts Passed by State Senate (5:27)

This week, SBAM's Vice President Communications Michael Rogers talks with SBAM’s Vice President Government Relations Dave Palsrok about courageous action by the state Senate to cut the state budget. The weekly Small Business Champion podcast is the place where you can get the scoop on what’s really happening in Lansing and what it means to your bottom line.

You can listen to the podcast by:

Clicking here to play the report on your computer.

  • Going to the podcast website and clicking on the audio player for this week's program to play the report through your browser.
  • Subscribing to the podcast in iTunes or other software by using this feed.
  • You can find a podcast archive here.

 


Survey Shows Small Businesses Interested in "Going Green" But Having Trouble Affording It

The National Small Business Association (NSBA), SBAM's national affiliate, released data showing that cash flow is the number one reason small-business owners are unable to make their firms more energy efficient. Despite restricted cash flow—likely due to the economic downturn—more than a third of small-business owners have invested in energy efficiency for their business in the last 18 months, however. This data is part of an NSBA survey released on Earth Day to spotlight the important relationship between energy efficiency and small business.

“We are seeing a trend among small-business owners who are looking to improve not just their bottom but the environment as well,” stated NSBA President Todd McCracken. “One-third of survey respondents said their business is currently offering energy saving products or services, and nearly a quarter actively strive to do business with “green” companies.”

Although just 18 percent reported that they plan to invest in energy-efficiency improvements in the coming year, nearly half said they would do so if provided with increased information, technical assistance, grants and/or rebates. Additionally, 67 percent said they would consider investing in alternative energy sources if provided with increased information, technical assistance, grants and/or rebates. Sixty-one percent said they would consider investing in alternative-fuel or hybrid vehicles for their business if it was accompanied by a tax credit.

“Given the extremely difficult economic challenges small businesses have been facing over the last nearly two years, the fact that there are still a significant number investing in energy efficiency is a testament to the important leadership role small businesses can take in any green movement,” said NSBA Chair Keith Ashmus of Frantz Ward LLP in Cleveland, Ohio

NSBA has long held the belief that energy efficiency and entrepreneurial growth can go hand-in-hand. Ninety percent of businesses surveyed have been negatively impacted by rising and/or volatile energy prices, and they are actively looking for ways to minimize the harm.

Please click here view the full survey results.

SBAM Praises Senate Cuts in State Budget

SBAM today applauded Senate action that cuts $1.2 billion from Michigan’s proposed 2009-2010 state government budget. “Small business owners across this state have been forced to make difficult cuts within their business operations and it is about time that our state government does the same,” says Rob Fowler, president and CEO of SBAM.

Michigan faces a $1.7 billion budget deficit for the 2009-2010 fiscal year. Compared to the Senate’s $1.2 billion in cuts, Democrats in the state House have proposed $525 million in cuts with more of the budget deficit to be made up with federal stimulus money.

Fowler praised Senate Majority Leader Mike Bishop (R-Rochester) and his Republican caucus for the difficult budget decisions they made this past week. “These are not easy decisions, but the reality of our current economic position demands that our leaders come up with budgets that are reflective of the actual revenues that are currently available,” says Fowler. “It is going to take bold leadership if we are going to find success in our economic recovery, and this week that leadership was demonstrated in the state Senate. We encourage all of our lawmakers to follow their lead all the way through the target setting and final budgetary process.”

The SBAM Small Business Champion Podcast: Small Business Innovation Research Program (SBIR) Funding Up for Renewal in Congress (4:15)

This week, SBAM's Vice President Communications Michael Rogers talks with SBAM’s Director of Government Relations Mike Batterbee about important legislation in Congress that would renew funding for the Small Business Innovation Research program. The weekly Small Business Champion podcast is the place where you can get the scoop on what’s really happening in Lansing and what it means to your bottom line.

You can listen to the podcast by:

Clicking here.

Going to the podcast website and clicking on the audio player for this week's program to play the report through your browser.

Subscribing to the podcast in iTunes or other software by using this feed.

You can find a podcast archive at http://www.sbam.typepad.com/focusingthepower/, where you can also comment on this podcast and find links to additional resources.

SBAM Presents Awards to State Senator, Journalist, Small Business Owner

SBAM named State Senator Jud Gilbert (R-Algonac) as the organization’s 2009 Legislator of the Year. Sen. Gilbert was presented the honor at SBAM’s 40th annual meeting and networking luncheon June 18 in East Lansing.

SBAM President and CEO Rob Fowler said that Sen. Gilbert, a small business owner, has been a friend to small business throughout his legislative career. “He is a key member on Senate committees that affect small business and has worked closely with our government relations staff on issues such as repealing the MBT surcharge, excluding sales tax from the MBT gross receipts formula, and he is currently shepherding a bill package through the Senate that would make Michigan’s regulatory procedures more efficient and more fair to small business.  And he has always had a consistent voting record on issues important to small business,” said Fowler.

Mark Sanchez, associate editor of Business Review Western Michigan, was named SBAM’s 2009 Communicator of the Year. Fowler said that “In his two decades of business reporting, Mark has shown exceptional skill in deciphering complex topics, like health care, and explaining those topics in a logical and understandable fashion. He is willing to fairly evaluate all sides of a controversial issue and present a balanced, informative and useful report to his audience. Mark’s writing displays empathy for his small business readers and a clear understanding of the challenges they face as entrepreneurs.”

SBAM presented its 2009 Advocate of the Year Award to Jerry Grubb of Wee Discover Child Daycare & Learning Center in Waterford. “Jerry has been a staunch advocate for SBAM,” said Fowler. “He has become an active member of the Legislative Action Council and not only contacts his legislative officials on a regular basis, he knows them on a first name basis.”

SBAM Announces 2009-2010 Officers, Board

SBAM announced their 2009-2010 officers at the organization’s 40th annual meeting and networking luncheon June 18 in East Lansing.

  • Chair: Mike Fox, Ingenuity IEQ, Midland
  • First Vice Chair: Cynthia Kay, Cynthia Kay and Company, Grand Rapids
  • Second Vice Chair: Yan Ness, Online Technologies, Ann Arbor
  • Secretary: Becki Kraus, Rebecca Kraus & Associates LLC, Grosse Pointe Woods
  • Treasurer: David Rhoa, Lake Michigan Mailers, Kalamazoo
  • Immediate Past Chair: Tom Mathison, Tower Pinkster Architects, Grand Rapids
  • The officers’ terms of office will run from July 1, 2009 to June 30, 2010.

Newly elected to the SBAM board of directors for terms that will run from July 1, 2009 – June 30, 2012 are Larry Eiler, Eiler Communications, Ann Arbor; Kirk Squiers, Central Michigan Graphics, Lansing; David Henderson, See Progress, Inc., Brighton; Bonnie Alfonso, Alfie, Traverse City; and Jerry Grubb, Wee Discover Child Daycare & Learning Center, Waterford.

Re-elected to the board of directors for terms that will run from July 1, 2009 – June 30, 2012 are David Choma, Metronet Telecom, Inc., Holt; Cynthia Kay, Cynthia Kay and Company, Grand Rapids; and Yan Ness, Online Technologies, Ann Arbor.

The SBAM Small Business Champion Podcast: SBAM Volunteers go to Washington, D.C., to Talk Federal Health Care Reform (7:09)

This week, SBAM's Vice President Communications Michael Rogers talks with SBAM’s Vice President Small Business Services Scott Lyon about a trip that he and a number of SBAM small business volunteers recently completed to the nation’s capital. One of the goals of the trip was to discuss federal health care reform with Michigan’s congressional delegation. The weekly Small Business Champion podcast is the place where you can get the scoop on what’s really happening in Lansing and what it means to your bottom line.

You can listen to the podcast by:

Clicking here to play the report on your computer.

Going to the podcast website and clicking on the audio player for this week's program to play the report through your browser.

Subscribing to the podcast in iTunes or other software by using this feed.

You can find a podcast archive here, where you can also comment on this podcast and find links to additional resources.
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