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On #smallbiz

Senior Vice President and Editor-at-Large of Black Enterprise Alfred Edmond, Jr. took to the Town Hall timeline to ask about small business owners.

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Small business owners wanted to make sure their voices were heard, so they spoke up on the social media platform.

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Black Enterprise multimedia content producer and tech guru Marcia Wade Talbert retweets the president’s take on small business opportunities.

Obama claims the biggest issue right now for small businesses is financing. “What we’ve tried to do is get the Small Business Administration, the federal agency that helps small businesses, to step in and to provide more financing—waiving fees, seeing if we can lower interest rates in some cases, making sure that the threshold for companies that qualify for loans are more generous.  And that’s helped a lot of small businesses all across the country.”

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On #education

Students nationwide chimed into the conversation, asking questions about the increase in cost of attendance at universities and colleges across the country, affording school and methods of repayment for student loans.

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• Obama let concerned students know that the government has and will continue to work towards keeping the cost of education down. “As part of a higher education package that we passed last year, what we were able to do was to take away subsidies that were going to banks for serving as middlemen in the student loan program and funnel that to help young people, through Pell Grants and lower rates on student loans,” said Obama.  “And so there are millions of students who are getting more affordable student loans and grants as a consequence of the steps that we’ve already taken.”
• He didn’t stop there, offering students relief in the near future. “In addition, what we’ve said is that starting in 2013, young people who are going to college will not have to pay more than 10 percent of their income in repayment.”
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On #jobs

Many Twitterers were concerned about employment and domestic job growth. The president highlighted advances his administration made over the course of his term such as the creation of two million private sector jobs over the last 15 months, freezing pay for federal workers and December’s payroll tax cut that put a reported $1,000 extra in the pockets of nearly every American.

He went on to discuss job creation and the infrastructure initiative. “We’re putting people to work right now—including construction workers who were disproportionately unemployed when the housing bubble went bust—to put them to work rebuilding America at a time when interest rates are very low, contractors are looking for work, and the need is there, that is something that could make a huge, positive impact on the economy overall.  And it’s an example of making an investment now that ends up having huge payoffs down the road.”

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On the #debtceiling

Those following the town hall were anticipating the answer to the tweeted question on whether or not Obama would invoke the 14th Amendment to ignore the debt ceiling as unconstitutional if he were unable to come to an agreement with Republicans. Mr. President responded with an indirect answer. Still, posing the question was worth the try.

*Find the complete transcript for the Twitter town hall at WhiteHouse.gov.

What did you think about President Obama’s Twitter town hall? Sound off below.

Headlines from around the web (Image: File)

• Southern Baptists Elect First African American into Leadership

The predominantly White Southern Baptist Convention has elected an African American to preside as first vice president of the nation’s largest Protestant denomination. Reverend Fred Luter’s appointment was made during the church’s annual conference in Phoenix.

• Stevie Wonder Inducted into Apollo’s Hall of Fame

Stevie Wonder joined musical greats Michael Jackson, Aretha Franklin and James Brown, to name a few, in the Apollo Legends Hall of Fame Monday night. The legendary singer was recognized during the historic theater’s famed spring gala, which raised over $1.2 million.

Tony Bennett presented Wonder with the honor. “It’s a moment to cherish and remember, relishing in the memories of the times that I’ve been at the Apollo, as well as this night, the great people that came out to support me being here,” the activist said in an interview. “It’s a great thing to be one of those people in the Hall of Fame for the Apollo.”

• President Obama and Job Council Map Out Ways to Increase Employment

President Barack Obama met with his Jobs and Competitiveness Council, led by General Electric Chief Executive Officer Jeffrey Immelt, Monday at Cree, Inc. in North Carolina. The jobs council advised the commander-in-chief on ways to create one million jobs over the course of two years.

In an opinion piece published Monday in The Wall Street Journal, council members Immelt and American Express chairman and CEO Ken Chenault unveiled a series of the committee ideas, ranging from supporting energy efficiency in public buildings to helping small business employers receive loans and greater assistance from the Small Business Administration.

• CareerBuilder Survey Reveals 25% of Blacks Feel Discriminated Against on the Job

A recent CareerBuilder survey uncovers that one in four African Americans reports feeling discriminated against at work. The 2011 Diversity in the Workplace survey, which looked at over 1,300 workers and the top 20 markets in the U.S., by population, discovered continued discrepancies in pay, career advancement, and feelings of intolerance.

The corporation gathered information for six diverse backgrounds, including African Americans, Asians, Hispanics, women, workers with disabilities and lesbian/gay/bisexual/transgender (LGBT) between February 21 and March 10 of this year.

“While companies have made strides in creating an inclusive workplace for all workers, there is still work to be done, especially in the areas of hiring, compensation, and career advancement,” said Dr. Sanja Licina, senior director of Talent Intelligence and Consulting at CareerBuilder.

• McDonald’s Feeling the Heat After Racist Sign Hoax

Over the weekend, this fake sign made its way around the Twitterverse. It’s an old online hoax that has found new legs as it gets passed around with the hashtag #seriouslymcdonalds. Chalk up another PR foible for the fast-food empire. Claiming that McDonald’s is charging African American customers an extra $1.50 as an “insurance measure due in part to a recent string of robberies,” first appeared on the Internet’s notorious 4chan bulletin board last June. But for reasons unknown, the pic appears to be stirring controversy once again.

Read more at AOL Black Voices…

Good and bad news in recent job report (Thinkstock)

• January Job Reports a Mixed Bag
• If you’re a glass half-full kind of person, then the January jobs report released today is good news. The unemployment rate fell from 9.4% to 9%,  the lowest the rate has been for 21 months.  In a conference call with reporters, Labor Secretary Hilda Solis said that the drop is encouraging and that the tax package that President Obama signed into law in January will be a “crucial incentive” for businesses, large and small, to invest in and create jobs in the U.S. this year.
• “While there is still work to be done, the data show the unemployment rate fell in January because more people are working and not because people are leaving the labor force,” Solis said.
• Dr. Thomas Boston, a Georgia Tech economics professor and member of the BLACK ENTERPRISE Board of Economists, disagrees. “People are celebrating the drop, but that’s where I see concern because of the number of [unemployed] people who are no longer being counted,” he said.
• Approximately 504,000 people dropped out of the labor market: some feel too discouraged, some may have decided to wait until the job outlook in their area improves, and others may have postponed their job search because of bad weather, Boston explains.
• “Generating jobs is one of our nation’s greatest challenges these days – only 36,000 jobs were created in January,” says Rep. Sam Graves (R-Missouri) “We can do better, but not through the administration’s plans for more stimulus spending and debt. That didn’t work before, and it won’t work now.”
• But Boston is less concerned about the number of jobs created because he maintains that it was, in large part, due to unexpectedly bad weather conditions that have hit large swaths of the country. “The industries that were the hardest hit and most sensitive to adverse weather patterns are industries where all the job losses occurred,” Boston says, citing sectors such as transportation and warehousing, construction and temporary help services.
• For African Americans, however, the glass remains nearly empty, with an unemployment rate of 15.7%. “Nothing has happened there and that’s an area of big concern,” says Boston, adding that the unemployment rates for both whites and Hispanics declined to 8.0% and 11.9%, respectively. “There has to be a concerted effort to look at sectors and groups in the economy that are the hardest hit by unemployment,” Boston says.

• Obama Calls on Egyptian President to Listen to His People
• Television viewers in every corner of the world have spent the past several days being virtual witnesses to the escalating political unrest in Egypt. During a joint press conference with Canadian Prime Minister Stephen Harper, President Obama condemned the violence and attacks on journalists and human rights advocates and called for the embattled nation to begin its political transition. President Hosni Mubarak announced earlier in the week that he would step down in September.
• Hinting strongly that the time has come for Mubarak to resign, Obama says: “He needs to listen to what is voiced by the people and make a judgment about a pathway forward that is orderly, that is meaningful and serious.” He also made it clear that the Egyptians must determine their own future, not outsiders.
• In a conversation with his Egyptian counterpart Omar Suleiman on Thursday, Vice President Joe Biden urged the country to immediately begin the negotiations necessary to transition to a democratic government that addresses its citizens’ aspirations.
• Aljazeerah, which has been live streaming today the “Day of Departure” protest currently taking place in Egypt, is reporting that Prime Minister Ahmed Shafiq has said that Mubarak does not plan to cede his presidential power to Suleiman until September and that there will be no early exit.

• Healthcare Reform: It Keeps Taking A Licking
• Senate Democrats successfully blocked their Republican colleagues’ efforts to repeal the bill on Wednesday, although the chamber approved a measure to eliminate a tax-reporting requirement in the bill that small business owners opposed by a vote of 81-17.
• “This fight isn’t over,” Senate Republican Leader Mitch McConnell said in a statement. “We intend to continue the fight to repeal and replace Obamacare with sensible reforms that would lower the cost of American health care, like medical malpractice, like selling insurance across state lines.” And according House Speaker John Boehner, “The debate has just begun.”
• Such thinking puzzles Congressional Black Caucus Chairman Emanuel Cleaver of Missouri, who believes that Republicans have better things to do.  “It was a waste of time,” he says of the Senate repeal effort. “Instead of focusing on creating jobs, their focus turned to putting insurance companies back in charge. Repealing the Affordable Care Act would negatively impact all Americans, but especially people of color.”
• On Thursday, Virginia Attorney General Kenneth T. Cuccinelli announced plans to bypass the appellate court process and take his state’s constitutional challenge to healthcare reform legislation directly to the U.S. Supreme Court. In December, a U.S. District Court in Virginia ruled that it is unconstitutional to require individuals to purchase health insurance and a number of challenges to the bill are under review in several appeals courts, following split decisions from four lower courts.
• But only U.S. District Judge Roger Vinson of Pensacola, Florida, has ruled that the entire Affordable Care Act is unconstitutional because the individual mandate provision cannot be severed from the bill. If lawmakers could force people to buy insurance, they could also force them to eat broccoli, he argued.
• In response, the White House said that Vinson’s ruling was “well out of the mainstream of judicial opinion” and “overreaching.” But you’ve got to wonder what stung more: his decision or his use of Obama’s own words to underscore his point.
• “Then-Senator Obama supported a health-care reform proposal that did not include an individual mandate,” Vinson wrote, “because he was at that time strongly opposed to the idea, stating that, ‘If a mandate was the solution, we can try that to solve homelessness by mandating everybody to buy a house.’” Touché!
• In the end, however, the bill’s fate may depend more on Obama’s reelection than the courts.

• White House Pushes Energy Efficiency and Investments in High-growth Startups
• As GOP lawmakers continue to press for the repeal of healthcare reform, President Obama has turned his attention to improving his relationship with the business sector and developing job creation strategies.
• The White House this week unveiled a Better Buildings initiative, which offers a package of tax breaks and financing to companies that make their buildings more energy efficient. “Making our buildings more energy-efficient is one of the fastest, easiest and cheapest ways to save money, combat pollution and create jobs right here in the United States of America,” said the president during remarks delivered at Penn State University.
• According to senior administration officials, the initiative will make commercial buildings 20% more energy efficient by 2020 and reduce business’ annual energy bills by about $40 billion. It also seeks to provide workforce training for a variety of energy-related jobs such as retrofitting and energy auditing. Both the Small Business Administration and the Energy Department will offer increased loan guarantee programs to encourage lenders to offer retrofit loans to small businesses. Obama is also proposing a competitive grant program for states and municipalities that streamline regulations and attract private investment for retrofit projects.
• Earlier in the week, the White House announced another initiative called Startup America, a public-private partnership that aims to promote investment in high-growth start-ups and small businesses and expand entrepreneurship training and mentoring. The SBA has committed $2 billion to match private-sector investment over the next five years in companies located in underserved communities and for early-stage companies that are having a difficult time accessing capital. AOL co-founder Steve Case will help lead the effort and several big ticker names have signed up, including Facebook, Hewlett-Packard Co., IBM and Intel.
• “I am encouraged President Obama has introduced initiatives to accelerate high-growth entrepreneurship and I am hopeful these kinds of initiatives will encourage more enterprise, specifically in the black community,” says freshman Rep. Allen West (R-Florida), who has been named to the House Small Business Committee. 
”This is something that the president has ignored for far too long.”

• House Republicans Prepare to Make Budget Cuts
• House Republicans have made what Budget Committee Chairman Paul Ryan (R-Wisconsin) calls a “down payment” on its pledge to slash government spending. Thursday morning he announced plans to reduce this year’s budget by $32 billion in non-security discretionary spending—a far cry from the $100 billion the GOP pledged to cut last year if it gained control of the House.
• “Washington’s spending spree is over,” Ryan declares. “Last year, House Democrats failed to pass, or even propose, a budget and the spending binge continued unchecked. After two consecutive trillion dollar budget deficits and with unemployment remaining unbearably high, we must chart a new course.”
• But according to South Carolina Rep. James Clyburn, Republicans are starting to realize that some things are easier said than done, but it’s the American public that will pay the price.
• “With great fanfare last fall, Republicans made a campaign promise to cut the budget by $100 billion.  Today’s proposal falls $68 billion short.  And at this level, we can expect serious job loss in critical sectors like law enforcement, education, and health care,” he says. “We have to find ways to tighten our belts and tackle the deficit without cutting investments that create jobs. Democrats want to build on the progress made over the last two years.”
• It also will be easier to talk about budget cuts, which the Appropriations Committee will recommend next week, and they will almost certainly pass in a vote the House has planned for the week of February 14. But then what? Neither Senate Democrats nor the White House will approve the approved cuts, and thus the budget battle royale begins.

Read more of our news and politics coverage…

• WATCH: Valerie Jarrett on Obama’s Job Plan for Black Americans
• Black Enterprise exclusive interview with Treasury Secretary Timonthy Geithner
• Half of Detroit Public Schools in Danger of Closing

The Obama administration wants to increase the number of minority businesses exporting to more than one country.

In an effort to narrow America’s trade deficit, the Obama administration unveiled the National Export Initiative (NEI), which among other things, is designed to foster growth in the number of minority owned enterprises that sell products and services in not just another country – but multiple countries.

This was underscored in Friday’s speeches by Commerce Secretary Gary Locke and David Hinson, National Director of the Minority Business Development Agency given at the annual Minority Enterprise Development Week Conference (MEDWeek) in Washington DC.

According to Locke, the Obama administration wants to increase by 50% the number of minority businesses exporting to more than one country. He says minority owned businesses provide some 6 million jobs with gross receipts of over $1 trillion and almost $170 billion in payroll. “They are also are twice as likely to export as traditional companies either because of cultural or family ties or business connections that they have with other countries,” he says. “And that really plays into the President’s National Export Initiative, which seeks to double the amount of exports over the next five years.”

Locke points out that less than 1% of US companies export goods – a significantly lower rate than other developed countries. As it’s in the nation’s own economic interests to narrow the trade deficit, there are scores of resources available to small businesses looking to sell their products and services overseas.

•    Export.gov is a portal that aggregates resources from other government agencies to help entrepreneurs compete globally. Their services include market research, trade events, trade leads, and information on how to export. The site also offers the downloadable Export Programs Guide: A Business Guide to Federal Export Assistance

•    The Export-Import Bank of the United States provides export financing products that fill gaps in trade financing by assuming credit and country risks that.

•    The U.S. Commercial Service is the trade promotion arm of the U.S. Department of Commerce’s International Trade Administration. U.S. Commercial Service trade professionals in over 100 U.S. cities and in nearly 80 countries help U.S. companies get started in exporting or increase sales to new global markets.

•    The International Trade Administration strengthens the competitiveness of U.S. industry, promotes trade and investment, and ensures fair trade through the rigorous enforcement of our trade laws and agreements. ITA has 2,100 employees assisting U.S. exporters in more than 100 U.S. cities and 77 countries

The owners of the Praline Connection were better prepared than other New Orleans businesses to recover from Katrina.

Curtis Moore and Cecil Kaigler, co-owners of the Praline Connection restaurant, were both more fortunate and better prepared than most other businesses when Hurricane Katrina bore down on Louisiana.

As restaurant manager Gloria Moore explains, their primary location on the edge of the French Quarter sustained only a little roof damage, but electricity and gas weren’t available until November because of damage to utility lines. A smaller food court site at the Louis Armstrong International Airport was temporarily closed while the airport served as a triage center. Their biggest losses were their 49 employees and a facility they’d leased near the city’s convention center that was used for large parties and convention events, and a Sunday gospel brunch that served 300 guests each week. It was the only one of their locations to not reopen.

Initially, the U.S. Small Business Administration was very eager to assist, Moore recalled, but a year passed before their loan application was approved. They repeatedly were asked to submit additional information that would then somehow get lost or the loan officer with whom they were working would be replaced by someone who requested other information. At one point the deadline for all documentation even expired because of SBA’s disorganization.

“The most frustrating thing was that they never called you. When I’d call to check on the loan, that’s when they’d go to the file and say they needed [various] documents,” said Moore. “I don’t know if this was others’ experience, but I never got a call unless I initiated it.”

One year after the process began, the agency approved the $285,000 loan for working capital and equipment replacement.

“There are a lot of anecdotal stories like that and we don’t challenge them,” said James Rivera, associate administrator of SBA’s Office of Disaster Assistance. Like all other agencies called on to assist in the recovery effort, the level of need was unlike any other they’d faced and they simply weren’t prepared.

When Katrina struck, SBA was in the middle of a transformation that included an internal reorganization, and a major computer system upgrade. Only 800 people could be on the new computer system at a time, so SBA had to incorporate shifts. Now 10,000 people can be on the system at once. The disaster loan processing system, which was located in Fort Worth, Texas, could accommodate only 366 seats; it has since been built up to accommodate 2100. There also are three different ways people can apply for disaster loans: electronically, by mail, or in person. Rivera added that the agency has substantially cut the amount of time it takes to process applications. In response to Hurricanes Katrina and Rita, the SBA disbursed in Louisiana 9,492 business physical disaster loans, economic injury disaster loans and loans to nonprofits for a total of $868,8 million.

Norman Roussell, founder of Capital Access Project, Inc., a nonprofit entrepreneur and economic development program, said that the federal government needs to do a better job of recognizing that following a disaster, small business recovery efforts needs to be given greater priority.

“In the beginning most of their recovery efforts ignored small businesses and they didn’t understand fully the economic impact that those businesses have on the overall recovery of neighborhoods and communities,” Roussell said. Some businesses, Roussell said, had made the mistake of minimizing their tax burdens, which in turn caused loan officers to say they didn’t earn enough income to justify loan payments, which forced them out of business. Others that were able to meet loan requirements weren’t able to borrow enough to completely rebuild.

According to Robin Keegan, executive director of the Louisiana Recovery Authority, the state began running a $9-$10-billion bridge loan program immediately after the storm that initially offered $25,000 grants with 0% interest loans, later increased to $100,000. “After about a year and a half, we programmed $138 million into a grant and loan program because we realized that SBA had really not helped the most disadvantaged businesses across the state and those most hurt by the storm,” Keegan said.

The new program offered businesses grants of up to $20,000 and they also were eligible to take out a 0% interest loan that could be used to pay down other debt or for working capital and inventory needed to restart. “The only eligible businesses were those that were in business before the storm that intended to reopen their businesses following the storm,” Keegan said.

Thanks to business income insurance and personal savings, the Moores and Kaigler were able to hang on until they were back in business, spending the interim period on cleanup and minor repairs so that when that time finally came, they’d be ready.  They also received a $10,000 grant from Idea Village and a $20,000 grant from the state
Today, the business has almost completely recovered financially, but finding qualified workers continues to be an issue. “A lot of workers have left and not returned,” Moore laments. “The 9th Ward was the backbone for hotel and restaurant workers, but they have nowhere to live and are scattered across the country.”

If your revenues are drying up, you might want to try these steps

Business was good–for a moment. Customers were loyal, performance was at its peak. Whether it was a ripple effect from a failing economy or new competition in the area, your franchise has taken a hit and sales are in the toilet. While a franchise can offer some of the benefits of being an entrepreneur without too many of the hassles – marketing from scratch, finding the right resources – it isn’t unheard of for individual franchises to tank.

“Franchise failure rates can be hard to quantify,” says Scott Jewett, senior adviser at iFranchise Group, an advice and consulting company for start-up franchises. “But I can assure you that you are more armed for success as a franchisee than starting your own independent business.”

The great thing about business is its cyclical nature. If sales have taken a dive at your franchise, Jewett offers a few tips for reviving it and understanding when it’s time to move on.

BlackEnterprise.com: If you’re not meeting revenue goals, how can you, a franchise owner, boost sales?
Scott Jewett: Some of the powerful benefits of franchise ownership are the sharing of best practices and the buying power for marketing.  Healthy franchise networks encourage franchisees to communicate what is working for them.  Why reinvent the wheel when you can learn from others in your network?  Also, be sure to participate in your franchise’s marketing programs. Not only can this boost sales but you may be legally required to participate.  Go back and check your franchise agreement and operations manual for required advertising and promotional requirements.

What are the most effective marketing methods for a franchise?
Franchises offer power in numbers.  It can be more effective to advertise as a group rather than as a sole proprietor.  Franchising is about building a powerful brand.  Follow your franchise’s guidelines for marketing.  The franchisor should have your best interest in mind when designing marketing campaigns.

Can a franchisee face fines or penalties from the franchisor for not meeting sales goals?
Some franchise systems have sales performance requirements.  Check your franchise documents and operational materials to make sure you are fulfilling your obligations as a franchisee.

What is the biggest mistake franchisees make when it comes to running a profitable franchise?
Being too entrepreneurial.  Entrepreneurs can be rule breakers and risk takers.  The most successful franchisees are often those who are diligent about complying with their franchise’s proven systems.

As a franchisee, what are three signs that it’s time to quit the business?

1. It has become apparent that you are not qualified to run the operations
2. You have an irreconcilable conflict with the franchisor
3. Being a franchisee has a negative impact on your happiness or health

How can a franchisee leverage social media and e-mail marketing to build a client base?
Social media and e-mail marketing are important tools as part of an overall balanced media mix for any type of business. Neither are magic bullets, but intelligently and diligently capturing customer data and maintaining a database is a good way to build a base for good e-mail campaigns. And social media is a good way to build a fan base, communicate with, and engage existing and new customers. The caveat with social media is that it is a fairly new media and many franchisors and franchisees are only minimally experienced in its use. It must be continually monitored and updated, and there is always the possibility of negative comments appearing on social media sites that require prompt responses by the company.  Also be aware that franchisors are beginning to establish social media usage policies to help maintain brand consistency, which would need to be followed by the franchisees.

Budget cuts have forced the Small Business Administration to reduce the amount of loans it is able to guarantee, but it is guaranteeing more loans.

It’s no secret that federal budget cuts have forced the Small Business Administration to reduce the amount of loans it is able to guarantee. While that may be the case, those numbers are trending upwards. For the current fiscal year ending September 30 the SBA has backed 50,639 loans totaling $14.49 billion through its 7(a) and 504 programs – an increase from the prior year.

The lenders are affiliated by the SBA in sense that the lenders – bank or otherwise – extends the capital to the business and submit it to the SBA for their approval as a guarantor. If approved, the SBA will back up to 75% of some or the entire loan. This means that if the borrower defaults on the bank or lending institution, the SBA will pay that institution 75% of the balance.

Todd Harrington is managing director and chief sales officer for CIT Group where he oversees all origination activity nationwide. CIT Group, a preferred lender for the SBA, provides business loans, financial services and financing solutions worldwide. Harrington has over 18 years of working with entrepreneurs to find solutions for acquiring capital. He recently spoke with BLACK ENTERPRISE about some of the less known facts about the SBA lending program.

Entrepreneurs can get up to 90% financing on real estate. If an entrepreneur comes in with a strong business and positive cash flow, most banks outside the SBA programs will require a larger down payment, says Harrington. “This allows an entrepreneur to grow their business and reserve capital for working capital and growth so all their assets aren’t tied up in real estate,” he says.

Loan terms can extend up to 25 years. According to Harrington, most banks that don’t have an SBA lending platform are going to look to keep that term around 15 years or so. “What many banks will do is finance the loan but instead of 10% down it’s going to be 30-35% down and then probably give you a 10-year deal that’s based on a 15-year amortization schedule.” This, in turn can lead to a balloon payment in that tenth year.

SBA-backed loans have no balloon payments. As non-SBA backed bank notes come up for renewal and one-time balloon payments are required, “it’s really putting some entrepreneurs in a tough position because their bank that did the deal 10 years ago might not be in a position to refinance that note today even though the borrower might be performing,” claims Harrington.

Renovation and construction financing is available under SBA programs. Because land is a relatively good buy depending on the market, this could be an opportunity to fund ground-up construction since it is part of the use of proceeds covered in the 7(a) program.

Under the SBA program there is a maximum interest rate a lender can charge. Most SBA lenders base the rate they charge to lend small businesses on prime – currently 3.25%. To that base, they add a spread the SBA mandates is capped at 275 basis points (a unit relating to interest rates that is equal to 0.01 of a percentage point). Based on this formula, the highest interest rate a lender can charge would be 3.25 plus 2.75, or 6%.

Still, there’s no guarantee that even an SBA preferred lender will extend a loan. An entrepreneur’s best defense is positive cash flow, sound financial health, and particularly in the case of startups, a well-written business plan and good credit score. For more information on SBA lending programs visit the agency’s guaranteed loan programs page.

Administration Comes Out for Small Business Week
National Small Business Week provided White House officials with plenty of opportunities to tout their efforts to assist entrepreneurs. In keynote remarks at the start of the conference, SBA chief Karen Mills promoted what she called the “3 Cs”—capital, contracts and counseling—which she said are the core of the agency’s mission.

Mills pointed to the Recovery Act initiatives that helped buoy the 7(a) and 504 lending programs and enabled the agency to increase lending to pre-recession levels.

“Altogether, we’ve taken about $680 million in taxpayer dollars and turned it into more than $27 billion in lending support for about 63,000 recovery loans,” Mills said. “That’s nearly double our weekly loan volume compared to the weeks before it passed.” Mills added that borrowers have reported that, as a result of the loans they received, they’ve saved and created “hundreds of thousands” of jobs.

According Mills, the agency helped drive close to $8 billion, or 29%, of Recovery Act contracts into the hands of small business owners. Of that, $3.4 billion, or 16%, has gone to minority businesses. She also said that the SBA is in the process of implementing a strong rule that will provide more contracting opportunities for women-owned businesses. The agency’s field staff, Small Business Development Centers, Women’s Business Centers and SCORE chapters, reportedly served more than one million clients in the past year.

Later in the week, Mills and Gene Sperling, counselor to Treasury Secretary Tim Geithner, announced a new state small business credit initiative to strengthen state programs that support lending to small businesses and manufacturers. This new initiative would require states to use federal funds for programs that leverage private lenders to extend credit to firms that are creditworthy but still having difficulty getting the loans or lines of credit needed to create and expand jobs.

National Small Business Week also provides an opportunity to heap praise on entrepreneurs and this year, four African Americans were rewarded: Rafael Collado, CEO and co-founder of Phacil, won the New Jersey state award. Edgar Smith Jr., chairman and CEO of World Pac Paper LLC, won the Ohio state award; Darryl K. Washington, president of DKW Communications Inc. in Washington, D.C., was named Region III Prime Contractor of the Year; and Keith Joy, director of small business programs at UT-Battelle LLC/Oak Ridge National Laboratory, won the Dwight D. Eisenhower Award for Research & Development.

Senate Panel Fast-Tracks SBA Deputy Administrator Nominee

Marie C. Johns

The Senate Committee on Small Business and Entrepreneurship voted unanimously on Thursday to move the nomination of Marie C. Johns as deputy administrator for the Small Business Administration to the Senate floor for a confirmation vote.

Johns served as president of Verizon in Washington, D.C., retiring in 2004 after more than 20 years in the telecommunications industry. She also is a former chair of the D.C. Chamber of Commerce and a former chair of the chamber’s small business committee. She is currently a member of the Howard University Board of Trustees and the Howard University Middle School of Math and Science.

During her confirmation hearing last week, Johns said that, if confirmed, she plans to play an active role in reaching out to groups that have been hard-hit by the recession, including women- and minority-owned businesses.

“Putting loans, contracts, and other job-creation tools in the hands of these fast-growing segments of the economy should be a priority,” Johns said.

A Democratic aide said that the committee is in the process of “hot-lining” the nomination. That means each Republican and Democratic senator will receive notice Thursday evening that the panel wants to move the confirmation forward by unanimous consent on Friday. If approved, Johns could be at work next week.

Congress Prepares to Merge Financial Reform Bills

Now that both chambers of Congress have each passed a financial regulatory reform bill, H.R. 4173 and S. 3217, lawmakers now must iron out the differences and reconcile the two. The task will be undertaken by 15 Democrats and 10 Republicans who will serve on the conference committee. Then the House and the Senate will have to vote on the final package before it heads to President Barack Obama for his signature.

House Financial Services committee Chairman Barney Frank (D-Massachusetts) said this week that he wants the chairs of his panel’s subcommittees to be part of the conference team. If House leadership agrees, Rep. Maxine Waters (California), Rep. Mel Watt (North Carolina), and Rep. Gregory Meeks (New York) will have a seat at the table.

In the meantime, House members are poring over the Senate version to figure out the key differences. So far, they seem to center on risk management, consumer protection, and derivatives regulation.

Both bills include the creation of the Consumer Financial Protection Agency, but in the Senate version it would be an independent division of the Federal Reserve versus a freestanding agency that the House bill calls for.

Waters reiterated her pledge to fight for an Office of Minority Inclusion, which did not make it into the Senate bill. She urges black consumers to lobby their lawmakers to support the provision during the Memorial Day recess.
“All blacks must understand that it’s important because that’s going to be our eyes and ears and our advocate,” Waters advised.

If only getting money to finance your business was this easy...

Happy National Small Business Week!

Every year since 1963, the president has proclaimed National Small Business Week to recognize the contributions of small businesses to the economic well-being of America. This year, NSBW will honor the estimated 27.2 million small businesses in America. More than half of Americans either own or work for a small business, and small businesses also create 60-80% of new jobs.

Despite those staggering numbers, small businesses are having a hard time getting financing as big banks keep a firm grip on lending. In the spirit of NSBW, BlackEnterprise.com wants to know how are you getting financing for your venture.

POLL: As a small business owner/entrepreneur where have you found capital needed to grow or sustain your company?

A. Microcredit organization

B. Friends and family

C. Bank loan

D. Angel investor

E. Savings/credit cards

F. Venture capital fund

G. Secure capital? It’s been virtually impossible

H.  Other (Please explain below)

Click here to vote in our poll, and submit your comments below.

Democrats Gear Up for 2010

President Barack Obama and Democratic National Committee Chairman Tim Kaine outlined this week the party’s strategy for the 2010 midterm elections. Ever since Theodore Roosevelt was in office, first-term presidents have lost an average of 28 House seats and 4 Senate seats during the midterms. Democrats are hoping to minimize their losses by running a campaign based on what they’ve accomplished so far with the support of the voters who helped Obama win in 2008.

In a video released on Monday, Obama issued a call-to-action to those voters, urging them to “stay involved.” The special interest groups that “rule Washington,” he warned, are gearing up to put their allies back in power so they can undo what Democrats successes, such as healthcare reform.

“It will be up to each of you to make sure that the young people, African Americans, Latinos, and women who powered our victory in 2008 stand together once again,” he said. “If you help us do that—if you help us make sure that first-time voters in 2008 make their voices heard again in November—then together we will deliver on the promise of change and hope and prosperity for generations to come.”

David Bositis, senior political analyst at the Joint Center for Political and Economic Studies, said that if African Americans turn out en masse as they did two years ago, young voters would be a bonus for Democrats. According to Bositis, a significant number of black voters live in states where there will be some very competitive races for Congress and statewide, where they can make a difference, so Obama’s appeal is a good idea.

“They will still lose some seats, but they’ll do okay,” he said.

Kaine announced on Wednesday that Democrats plan to spend approximately $50 million to woo first-time voters and past supporters. In addition, Democrats will run as the “Party of Results “and bill Republicans as obstructionists who put the needs of Wall Street above Main Street’s.

His prepared remarks reportedly included comments that Republicans also would try to suppress low-income and minority voters from casting ballots this fall, that weren’t delivered. That didn’t stop the GOP from calling foul, however.

“Out of options, the president and his top campaign aide are going back to the Democrats’ worn-out playbook and making false and reprehensible comments accusations of voter suppression,” said Republican National Committee Chairman Michael Steele in a statement. “At what point will Chairman Kaine and the Democrats realize that polarizing this country on the lines of race is not only passé, it’s wrong and ineffective.”

Others charged both Obama and Kaine with playing the race card, which Bositis said is ludicrous and suggests that they do not take the problems of race in this nation seriously.

“Social norms in this country have changed to the degree that it’s seriously frowned upon by most decent people to use overtly racist language so they use coded language,” said Bositis. “And clearly their attitude toward Obama and the things they say about him are a reflection of their general attitudes toward black people and those attitudes are negative.”

Greater Broadband Access for Small Businesses Sought

According to the Bureau of Labor Statistics, jobs that depend on broadband and information and communication technologies will grow by 25% between 2008 and 2018. In addition, broadband connectivity can be powerful tools to help small businesses reach new markets, increase productivity and efficiency, and generate economic growth, said Federal Communications Chairman Julius Genachowski in testimony before a Senate small business panel on efforts to expand small business Internet access.

According to FCC reports, businesses with 25 or fewer employees pay two times more per employee for broadband than those with more than 25 employees. The agency’s National Broadband Plan encourages broadcasters to give up unused spectrum so it can be used to expand broadband services to small businesses around the nation.

Genachowski said that the FCC’s Office of Communications Business Opportunities is working with various business chambers to improve digital literacy among minority and women-owned businesses as part of its efforts to support and encourage diversity in the telecommunications industry.

Those efforts also include workshops and roundtable discussions on broadband’s impact on small and diverse businesses, capitalization challenges, and a networking program to connect those firms with larger telecommunications firms.

“Expanding broadband access and adoption is not just the FCC’s job; we all have a role to play,” said Senator Mary Landrieu, who chairs the Senate Committee on Small Business & Entrepreneurship. “We have some challenges ahead, and it’s important that we understand how to best work together to implement our National Broadband Plan to benefit small businesses, particularly in rural, underserved and unserved areas of the nation.”

SBA Announces Energy Efficiency Aid to Small Businesses

Does your business need an energy upgrade? The Small Business Administration announced on Friday that it has awarded small business energy efficiency grants to Small Business Development Center (SBDC) networks in seven states.

Each grant is in the amount of $125,000 and will be used to provide energy assistance. Small businesses will receive education, training, energy efficiency audits, and information on how to adopt energy efficient practices. They may also receive help with the purchase and installation of energy-efficient building fixtures and equipment.

“It’s a win-win because a small business saves on energy bills while contributing to the growth of green jobs in other local businesses,” said SBA Chief Karen Mills. “The grants contribute to SBA’s efforts to help small businesses facing increasing costs of fossil fuels and diminishing energy resources.”

The SBDCs that received grants are in Arizona, North Carolina, Pennsylvania, Idaho, New York, Nevada, and Nebraska. The latter four will use the grants to expand existing programs.