Business Information for Entrepreneurs by an Entrepreneur

2010 is supposed to be a big transition year for small business. Indicators show the economy is improving. More guaranteed loans are available for small business owners. So within a year, happy days will be here again, right?

Perhaps, but according to a recent study published in February 2010 by Forbes, most small business owners are cautiously optimistic and still expect to have hard times in 2010. The study, "U.S. Small Business Outlook 2010," shows the current temperature of business owners as 2009 came to a close.

One question about cash flow was not surprising. When asked if it was harder to manage cash flow now than 12 months ago, 64 percent said it is harder, while 26 percent said it was the same. Lower revenues were the biggest contributor to harder cash flow, while slow or non-paying customers were in the #2 spot.

And when asked about company revenues in 2009, 73 percent said their revenues either stayed the same or declined in 2009, with 26 percent having significant declines in revenue. 63 percent of small business owners reduced their budgets to help with lower revenues, while 55 percent cut back on entertainment. 45 percent actually cut their workforce to get by with lower revenues.

The hardships seem to be a blessing in disguise, however. While 66 percent of small business owners say they are working harder and longer than ever, 80 percent agree that they are smarter about operating their business as a result of the economic crisis, and 70 percent agree that they have become stronger leaders.

Looking ahead, small business owners do see 2010 as the year the financial crisis bottoms out and financial markets turn around. But the optimism stops there for 2010. Most small business owners see business stability happening in 2011, while 2012 will be the year for the return to growth.

Happy days are not quite here again. If the projections of current small business owners are accurate, it will be another two years before prosperity returns. But the good news is that small business owners are smarter than they were before the financial crisis started. Entrepreneurs are smarter about the way they run their businesses. They see the importance of planning and want to spend the time doing it. And they recognize that they will need to do business in new ways in order to succeed.

Everywhere there are signs - and the signs are showing that small businesses are emerging through the recession and beginning to thrive once again. According to data released by CDC Small Business Finance in Los Angeles, a non-profit Certified Development Company, small business real estate loans rose 40% in January 2010.

Signs of Revival

L.A. area loans for real estate purchases were up to $71.6 million, compared to $50.9 million in December. This is good news, especially from an area that was hit hard by the recession and has suffered some of the highest property foreclosures in the country during the last two years.

How the SBA 504 Loans Work

The loans are a part of the SBA 504 loans, aimed at helping small businesses acquire real property, large equipment, and other fixed capital needs. With the help of this program, small business owners have an easier time qualifying for and getting access to much needed capital to expand their business.

The SBA 504 loan is structured so that the borrowing business must pay only 10% down for the property, and the rest is financed as a split between a traditional lender and a non-profit corporation set up under the 504 code to help support economic growth in their local area. 50% of the loan is disbursed by the bank lender, with a guarantee from the SBA should the borrower default. The remaining 40% is disbursed by the non-profit corporation, known as a Certified Development Company (CDC).

What are the eligibility issues for obtaining a 504 real estate loan? Borrowers must have less than $2.5 million in net income over the last two years. Also, the net worth of the company must not exceed $7.5 million. Loans must be used to purchase improved real property, vacant land with the intention of constructing new buildings, renovating existing buildings, or for purchasing long-term equipment or machinery.

So many small businesses can benefit from this helpful guaranteed loan. If your small business meets the eligibility mentioned above, and you are ready to start expanding your business, look up your local CDC and find out how you can get access to money that will help your business grow.

Recent blizzard conditions across most of the American midwest and east coast areas have shut down businesses, as well as government offices, for days on end. There has certainly been lost productivity, as well as damages caused by the storm. How does all this impact your small business?

The Toll of Severe Weather

Severe weather conditions can spell disaster for a small business that depends on the day-to-day routine of production and sales. Days without production causes inventory to deplete, go stale, or even become damaged or destroyed. Missed sales are another cause of economic loss when employees are not able to be at the business to take or fill orders.

And what if worse should happen? What if a storm causes physical damage to equipment, machinery, or your owned property where you do business? All these instances are being felt after the recent storms in February 2010 across America. The good news is that there is help available to small businesses who suffer from the effects of storm damage.

Help for Your Impacted Business

The Small Business Administration (SBA) has programs that provide disaster loans to small businesses with this type of damage. One category is Business Physical Disaster Loans, which are available to any size of business, including non-profit businesses, churches, and private universities. These loans can be used to repair property that was damaged from a disaster, including real estate, equipment and machinery, supplies, and inventory.

Another category of SBA disaster loans is the Economic Injury Disaster Loans. These loans were created to help small businesses through disaster recovery by providing working capital. Businesses that have lost cash flow due to lost sales and other disaster expenses can stay afloat with the help of this low-interest loan.

These loans are available in regions that have been declared disaster areas. Many times, a severe storm, such as the recent widespread winter snow storm, is cause for a disaster. If your business has suffered economic loss due to physical damage, or even lost sales and cash flow, you can seek help from these low-interest loans up to $2 million.