Obtaining a Small Business Loan Should Become Easier

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President Obama and Treasury Secretary Geithner’s March 16th announcement of plans to “Unlock Credit for Small Business” should have a very positive impact on small business lending in the U.S. Specifically, they have temporarily increased the Small Business Administration 7(a) loan program guarantees from 75% to 90% of the loan value, as the lower percentages had not been large enough to give banks the confidence they need to lend. As most small business owners realize the first time they apply for a small business loan, the SBA is not the actual lender, there still needs to be a lending institution that is willing to take them on as a credit risk. This recent action by the Obama administration shifts more of that risk to Uncle Sam, and should have a very favorable impact on how lending institutions view the risk-return of small business loans, increasing the flow of credit to this essential part of the U.S. economy.

Where I sent the $15 instead….

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…..well actually it was more than $15 to convert to WordPress, but Diane Ensey at Beyond Paper provided amazing value and service, getting me off Blogger onto WordPress over a recent weekend, so I would like to thank her here, and recommend her to those of you who need similar help with your website. Additionally, Danielle Sukartty at Yakindo Web Design demonstrated great knowledge and energy applying her talents in the area of Search Engine Optimization (SEO) on the Rudofsky Associates website, and I am happy to report that my Google search results are vastly improved as a result of her work.

What Can the Movies Teach Us About Finance?

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When I was asked by The New School to teach NMGT2133 “Introductory Finance for Business”, I had the inspiration to use excerpts from movies and television to reinforce some of the class learning objectives. It seemed like a “no-brainer”; many of my students would be media majors, so this would be a great way to bridge my world and theirs.

Finding suitable films and tv shows to quote for this purpose has proven somewhat more difficult than I expected. An MSNBC survey article, “The Top 10 Business Movies,” gives some perspective why. In this unscientific 2004 poll, 74% of responders cited the side-splitting film, “Office Space” as their favorite “business-themed” film, followed by “Godfathers 1 and 2”, and “It’s a Wonderful Life.” Finance may be the lifeblood of business, but as a group, the 10 choices given to MSNBC readers depict the struggle to succeed in business from a comical, sentimental and suspenseful standpoint, while doing little to educate viewers on financial concepts.

Fortunately, I was able to find some great choices, including the Million Dollar Idea episode from “The Lucy Show”, “Wall Street”, “Other People’s Money” and “Lost in Lamancha.”

The course is open to the general public as a continuing education offering, meeting Mondays at 4pm, with the first class on 1/26/09. Or if you are interested in some recommendations, on finance-related books, try some of these:

“Finance for the Non-Financial Manager”, by Gene Siciliano
“When Genius Failed”, by Roger Lowenstein
“Buffet: The Making of an American Capitalist”, by Roger Lowenstein
“Barbarians at the Gate”, by Bryan Burrough and John Helyar
“Optical Illusions: Lucent and the Crash of Telecom”, by Lisa Endlich
“Disney Wars”, by James B. Stewart
“Den of Thieves”, by James B. Stewart
“Stocks for the Long Run”, by Jeremy Siegel
“Capital Ideas Evolving”, by Peter Bernstein
“Liar’s Poker”, Michael Lewis

How Does Your Company’s Profitability Stack Up?

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Suppose you are a retailer with $600,000 annual sales, what would be a normal amount to expect to achieve in annual gross profit? In net profit? Inc. Magazine’s November issue includes a profitability calculator, based on surveys of key financial metrics for 19 different industries by Sageworks, in partnership with Inc Magazine. The retailer mentioned above would have annual gross profit of $192,000 and net profit of $16,200, based on typical gross profit margins and net profit margins for retailers of 32% and 2.7% respectively. For those interested in a survey of private company profitability with even more granular data, and willing to pay for it, try Annual Statement Studies, published by the Risk Management Association.

How Does Your Company’s Profitability Stack Up?

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Suppose you are a retailer with $600,000 annual sales, what would be a normal amount to expect to achieve in annual gross profit? In net profit? Inc. Magazine’s November issue includes a profitability calculator, based on surveys of key financial metrics for 19 different industries by Sageworks, in partnership with Inc Magazine. The retailer mentioned above would have annual gross profit of $192,000 and net profit of $16,200, based on typical gross profit margins and net profit margins for retailers of 32% and 2.7% respectively. For those interested in a survey of private company profitability with even more granular data, and willing to pay for it, try Annual Statement Studies, published by the Risk Management Association.