Obama Announces Small-Business Lending Push

By ROBB MANDELBAUM
Published: October 21, 2009
After enduring months of criticism that his administration had done too little to help small businesses weather the recession, President Obama said Wednesday that “there’s still too little credit flowing to our small businesses” and unveiled initiatives he said would open the spigot.
The measures, announced by Mr. Obama at a small records storage company in Maryland, would allow smaller community banks to borrow at low rates from the Treasury Department’s Troubled Asset Relief Program. It would also raise the loan caps on several popular Small Business Administration programs.
Under the administration plan, banks with less than $1 billion in assets could borrow from the program at a lower interest rate than financial institutions are required to pay.
In exchange, banks must demonstrate how they would increase lending to small businesses and follow up with quarterly reports. According to the White House, most business loans by the community banks that are eligible for the new rules are made to small businesses.
In addition, community groups that lend to small businesses in low-income areas under a Treasury Department program will be able to borrow relief money at just 2 percent annually for eight years. In the past, banks have been leery of the such loans because the program allows the government to buy warrants for the banks’ common stock and because it requires the institutions to limit executive compensation. But the small banks probably will not have to issue warrants in that program rules contain an exception for infusions of less than $100 million. The proposal as described Wednesday caps the infusions at $20 million.
The small institutions would be subject to the same compensation rules as any other relief recipient, said Gene Sperling, senior counselor to Treasury Secretary Timothy F. Geithner, in an interview. But, he added, “for these smaller community banks, the executive bonus restrictions will usually affect only their single most highly compensated employee.”
But some community bankers remain concerned. “I think that could be a damper on community bank involvement in this program, said Cam Fine, president and chief executive of the Independent Community Bankers of America, a trade association. “Those family-owned banks are not going to want to subject themselves to compensation restrictions imposed by TARP, because it is their own personal money that is the capital of the bank.”
Changing the S.B.A. loan limits will require approval from Congress. The administration’s plans, which would raise the limit on the most popular loan to $5 million from $2 million, are identical to provisions of a bill introduced by Senator Olympia J. Snowe of Maine. She is the ranking Republican on the Senate Small Business Committee and is seen as perhaps the only Republican who may vote for a Democratic-led health care bill.
In a statement, Ms. Snowe indicated she appreciated the gesture. “These actions will help satisfy the capital needs of small businesses looking to start or expand their operations,” she said.
Unlike the S.B.A. proposals, the bailout plan can take effect at the administration’s direction.
“Our goal is to conduct a wide spread consultation with the small business and small bank community for a few weeks, and get this operational as quickly as is practical,” Mr. Sperling said. Check us out at www.sellingrestaurants.com

BizBuySell.com Third Quarter 2009 Data Signals Improving Business-for-Sale Market

Business-for-sale transactions begin to increase after hitting bottom in recent months
San Francisco, CA - October 6, 2009 - BizBuySell.com -- the Internet's largest marketplace for buying or selling a small business -- today released economic data for the third quarter of 2009. After multiple quarters of declining business-for-sale transactions, the new numbers suggest that the state of the small business economy is finally beginning to improve.
BizBuySell.com's new Third Quarter 2009 Insight Report shows a 24% year-over-year drop in closed small business transactions. While still lagging behind year-ago transaction numbers, BizBuySell.com's previous report -- which included data for the second quarter of 2009 -- showed a dramatic 50% decline in closed business-for-sale transactions when compared to the same time period in 2008. Closed transactions are reported to BizBuySell.com by business brokers nationwide.
BizBuySell.com's quarter-over-quarter data also supports the rebound in the business-for-sale marketplace. The number of closed transactions reported in the third quarter increased by 7.4% as compared to second quarter transactions. Just one year earlier, when the recession was hitting its stride, that same quarter-over-quarter statistic dropped 30%.
"After many bleak months for the small business-for-sale economy, the market seems to have hit bottom and is fortunately now beginning to turn around," says Mike Handelsman, General Manager of BizBuySell.com. "As credit eases, business fundamentals recover and SBA lending criteria change with respect to goodwill, we are optimistic that the fourth quarter of this year and the first quarter of 2010 will show increased signs of recovery and growth."
Closed Transactions Increase as Pricing Drops
BizBuySell.com's third quarter data suggests that business sellers are dropping their prices, which is making it possible for more deals to close. For example, the median sale price for closed transactions fell to $149,000 from $189,500 year-over-year, a 21.4% decline in price.
The metrics used to value companies have seen a similarly dramatic downward trend. Revenue multiples on reported closed transactions dropped 9.6% to .62 in the third quarter of 2009, and cash flow multiples dropped to 2.44, a 12.2% year-over-year decrease. The revenue and cash flow multiples are calculated by dividing the selling price of the business by its reported annual revenue or cash flow.
"These year-over-year price declines are dramatic, and suggest there are good deals out there for potential business buyers," says Handelsman. "With unemployment at record high levels, and SBA lending loosening beginning in Q4, this decrease in pricing and valuation numbers has made the prospect of purchasing a business much more achievable to buyers."
Business Brokers Optimistic About Business-for-Sale Transactions
A recent BizBuySell.com survey of business brokers around the country similarly revealed that they are positive about the future of small business transactions:
34% of business brokers reported expecting to close their next deal within the next few weeks.
75% of survey respondents expect to close their next small business transaction within the next three months.
47% of survey respondents believe small business transaction levels will not fall any further than they were during the second quarter of 2009, which leads 78% of survey respondents to believe that business-for-sale transactions will begin to increase again before Q2 2010.
For more information on the BizBuySell.com Third Quarter 2009 Insight Report, visit http://www.bizbuysell.com/news/media_insight.html.
About BizBuySell:
BizBuySell.com is the Internet's largest and most heavily trafficked business for sale marketplace, with more business for sale listings, more unique users, and more search activity than any other service. BizBuySell.com currently has an inventory of over 47,000 businesses for sale, and more than 700,000 monthly visits. BizBuySell.com also has one of the largest databases of sale comparables for recently sold businesses and one of the industry's leading franchise directories.
BizBuySell.com was founded in 1996 and acquired by LoopNet, Inc. in 2004. LoopNet operates the largest commercial real estate listing service online, with more than $500 billion of property listed for sale and 5.7 billion square feet of space for lease. With over 3 million members, LoopNet attracts the Internet's largest community of commercial real estate professionals. For more information, visit www.bizbuysell.com.
Media Contact:
Frank Krolicki Walker Sands Communications office: (312) 546-4127 email: fkrolicki@walkersands.com
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Colorado minimum wage set to fall next year

By George, someone in Colorado took an economics course! One doesn't raise the minimum wage when unemployement rate is increasing. Will someone please tell that to those clown in Sacramento! And Washington D.C.!

From Nation's Restaurant News
By Alan J. Liddle


DENVER (Oct. 14, 2009) Colorado restaurateurs and other employers may reduce the pay of non-tipped minimum-wage employees by three pennies an hour and pay tipped workers four cents less beginning Jan. 1, according to the Colorado Department of Labor and Employment.
The wage reduction is based on a state constitutional amendment passed by voters in 2006 that calls for the minimum wage to be adjusted annually based on changes in the cost of living. Until now, inflation has pushed Colorado’s pay floor higher, but that is about to change.
Colorado’s pending wage decrease is believed to be the first among the 10 states that have mechanisms to adjust minimum-wage rates annually based on inflation indexes. The other states with such mechanisms are Arizona, Florida, Missouri, Montana, Nevada, Ohio, Oregon, Vermont and Washington.

According to a recent Colorado Department of Labor and Employment notice, beginning Jan. 1, the state’s minimum wage will decrease from $7.28 an hour to $7.24 for non-tipped employees and from $4.26 an hour to $4.22 for workers receiving gratuities. While most employers will have to at least meet the current federal minimum wage of $7.25 an hour for non-tipped workers, they may take the full four-cent reduction for employees who receive gratuities because the federal pay floor for individuals who receive tips, $2.13 an hour, is lower than Colorado’s rate.

The Colorado reduction is based on a 0.6-pecent reduction in the Denver-Boulder-Greeley Consumer Price Index between the first half of 2008 and the first half of 2009.
A call to Colorado Restaurant Association officials for comment was not returned by press time. The CRA opposed the wage-indexing amendment when it was put before voters.
Peter Meersman, chief executive and president of the CRA, told the Denver Post that his group will not make a recommendation to members related to maintaining or reducing wages.
Some advocacy groups for the working poor have urged employers not to take the reduction.
A hearing to allow public comment about the proposed order to lower the wage in accordance with the inflation-adjuster mechanism is set for Nov. 6 in Division of Labor chambers in Denver.

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Some People Are Just Too Serious

For those that know me, you know that I laugh a lot. I laugh at myself. I laugh at life's funny situations. I even laugh at politics and the silly things we see that go on in today's world. Darn, one has to laugh to keep sane!

There are those moments in my business where I often say to myself "our business would make a great reality show."

Let me give you an example of the humor I'm faced with each day. SellingRestaurants registers about 150-175 new customers each week. And each week there are those who don't want to play by the rules. They make names and phone numbers up. We've got Ronald Reagan, Barack Obama, and of course John and Jane Doe register on our website, just ot name a few. But the other day, I had the most unsual name register on our website - Sexual Blue.

Now what would the average person think? Of course the average person would instantly think the name is false, right? Well believe it or not, his name is Sexual Blue.

Well I suppose we all make mistakes...sorry Sexual Blue! No one is perfect! Not even your parents!

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KEEP THE MONEY IN YOUR COMMUNITY

How often do you go to chain restaurants like B.J.’s, Mortons, PF Changs, Claim Jumpers and whatnot? Did you know you could help your local economy more by going to locally owned restaurants? Think about it. When you spend a dollar at a chain restaurant all the profit leaves the area. If you eat at locally owned restaurants all the profit stays right in your community helping to employ more people. The restaurant owners in turn spend their profits locally.

Personally, I never eat at chain restaurants, not only because I want to support my community, but because the food and service is usually better than the chains. So start helping your community, eat out and eat at locally owned restaurants.

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It is the Darkest Just before Dawn

Perhaps you’ve heard it before –“it’s the darkest just before dawn.” This phrase is used to describe the hope that is coming after a period of hopelessness. Times where it seems the world is ending; where fear paralyzes the masses and stops them in their tracks while the masses, like sheep, follow their “fear sheppard” to the wolves.
I’ve can’t recall the last time I woke up to watch a sunrise. So I don’t know if the phrase it literally true or not. A simple Google and I’m sure I’ll discover it isn’t. But it’s the meaning of the phrase rather than the legalist accuracy of the phrase that matters.
Today, people are uncertain about the future of their personal, as well as the country’s, economic future, stopping people cold in their tracks from making investments and spending money.

I say it is this very time that smart people recognize the opportunities and seize them. I say when it appears to be the darkest, it is time to buy; it is time to invest. Back in March 2009, the stock market looked like it was headed to bottoms that haven’t been seen in more than a decade. The whole nation was paralyzed. The “fear Sheppard” was out in masses and the masses where following the Sheppard. People panicked. People sold their stockholdings. It seemed the darkest.

But had one bought stock at that time, they’d be looking at 60-100% profits or more. I happen to have lived during the 1987 stock market crash known as Black Monday. That day in October the stock market dropped 25% in one day. It has never dropped that much in one day before or since. To equate that drop into today’s market, that’d be like shaving 2,500 points off the Dow Jones in one day.

Even during the darkest of times in earlier 2009, the Dow only fell 800 points or so in a day. So in October 1987 it was very dark comparatively speaking. Of course, today there are far more complex dynamics playing into the market demise. Had one bought in October 1987, they’d be very wealthy today despite the recent drop in stock prices. But in hindsight it was the best time to buy.

I believe this basic philosophy of buying when all others are petrified in stone by the current situation will result in great wealth being created in the future. I believe in not following the crowd, but rather going against the crowd. When the crowd starts buying, then you ought to seriously think about selling. And when the crowd starts selling or stops buying, you ought to think about buying.

So watch the crowd and go the opposite direction and you can’t go wrong in the long-run.

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