New York SBDC Research Network

Excerpt from an article by Bob Coleman To read more, visit  ColemanReport "Paypal, Amazon and Alibaba pose more of a threat to traditional lenders than the Fintech industry. As Fintech ebbs and flows, these high tech giants are starting to put up some serious small business lending numbers. Amazon just passed $3 billion. Last year Paypal also topped $3 billion in small business lending in the United States. In the US, PayPal offers two financing programs, including one that is similar to the UK program, which takes a percentage of merchants’ PayPal revenue and is underwritten primarily on PayPal sales without a credit check. The other program available in the US is closer to a conventional business loan, taking into account a variety of credit factors and repaid with weekly payments from a business bank account."

Ignoring your financial statement is like ignoring the health of your business. Startups and new business owners often overlook understanding gross margin. This can have a direct impact on your ability to effectively manage a growing business, price your products, and most importantly, make a profit. CONTINUE READING

Starting a business can put a burden on your personal finances. It takes time before your new venture turns a profit and provides financial support for you and your family. Before starting a business, it is important to get your finances in order. Read more about how business and personal finances are related , and why strains on your personal budget can cause a financial risk to your business.

According to the  findings of a 2014 Intuit study , more than 40 percent of U.S. small businesses consider themselves financially illiterate. Yet, 81 percent handle their business’ finances. April is National Financial Capability Month, so now is a great time for small businesses and aspiring entrepreneurs to brush up on their  financial literacy skills . Whether you are a seasoned small business owner, a new small business owner or have dreams to be a future small business owner, it is inevitable that you will at some point have to deal with securing the capital to fund and/or expand your business venture. There are several  financing options  to explore when funding a small business such as loans, grants, venture capital, angel investors and crowd funding, but most small businesses rely on lenders to obtain the capital needed to open a business or to finance capital improvements.

By  Caron_Beesley U.S. businesses are selling more goods and services abroad than ever before, reaching an all-time record of $2.3 trillion in 2013 – and 98 percent of American companies that export are small businesses. Despite the statistics, many small businesses still face big challenges when it comes to financing and managing their export business. A recent trade seminar, hosted by the Department of Commerce and several other federal agencies,  identified three commonly cited financial obstacles  small businesses have to going global: Don’t know how to obtain working capital and financing to support export transactions Don’t know where to seek assistance for entering, growing and succeeding in global markets Don’t know how to get paid by foreign buyers overseas Helping entrepreneurs overcome such challenges are key priorities for the  SBA , Business.USA.gov , and the  International Trade Administration  (which supports the President’s  National Export Initiative ).

As July ends, so does  Independent Retailer Month , - celebrate the successful family-owned, mom-and-pop, independent stores out there by using some resources on BusinessUSA to help you  Grow your Business , including: Forecasting for Growth Check out the competition in your area with our  SizeUp Tool Developing a Marketing Plan Using Technology to Stay Competitive Financing Growth Building your own Franchise

February is heart month. We wear red, we have heart healthy screenings, and we are reminded that heart disease is the leading cause of death among Americans. During the month, we learn how to mitigate heart disease. While our bodies and our small businesses may not be an exact parallel, it makes for a good analogy. Your small business is like your body. The heart of your small business is finance related. Most businesses fail because of lack of financial management - lack of capital. Finance, generally speaking, pumps life in (or out of) your business. Your financial statements are like an EKG. It can help identify problems or underlying issues. While you should have a check-up on both your body and your business frequently, it's advantageous to at the least have an annual checkup. But what good is your EKG if you don't know how to read it? More from the ASBDC .

Credit conditions for small businesses have been gradually improving, which is portrayed in Advocacy’s updated Small Business Finance: Frequently Asked Questions . You'll find answers to questions on the general small business financial borrowing, government financing, as well as policy issues on this matter. Should you need further information, please feel free to call (202) 205-6533 or email advocacy@sba.gov.

A dramatic drop in U.S. exports during the 2008-2009 financial crisis and Great Recession stimulated interest in investigating the relationship between trade finance and small business exports. This research examines how and why the tightening of credit affects small firm exporters. Should you need further information, please feel free to contact Dr. Jules Lichtenstein at (202) 205-6533 or advocacy@sba.gov.

$2.95 Billion in Financing for Small Businesses in FY12 WASHINGTON – The U.S. Small Business Administration’s Small Business Investment Company (SBIC) debenture program provided a record $2.95 billion to small businesses in fiscal year 2012, a 14 percent increase over last year’s $2.59 billion and an 85 percent increase over 2010, also a record year. “Over the past three years SBA has transformed the SBIC program to ensure small businesses have greater access to SBIC funds,” said SBA Administrator Karen Mills. “These record-setting numbers are proof that our efforts to streamline and simplify the process have made it possible to get capital into the hands of small businesses more quickly. When an SBIC invests in a small business, it can scale up and create jobs.” High-growth small businesses continue to face difficulties in accessing patient, long-term capital to grow and create jobs. Since 1958, the SBIC program has helped fill these gaps and has invested approximately $63 billi

This document [PDF] sketches the ecosystem or life-cycle of small business financing. The FAQ format allows users to browse through topics and learn about specific issues. The financial needs of small businesses, which include start-ups, in sectors such as information technology, service, retail, and manufacturing differ. The answers provided represent averages or totals that can be used as figures and trends for differing types of firms. Should you need further information, please feel free to contact Victoria Williams at (202) 205-6533 or advocacy@sba.gov.

The Small Business Quarterly Bulletin [PDF] from Advocacy's Office of Economic Research is a brochure-style publication that contains commentary and analysis on the current employment and financing trends of small businesses.

One of my State Data Center colleagues, Dale Miller, pointed this out to me. He thinks this is important to share, and I quite concur. Moreover, this being the graduation season, it’s timely! He has discovered that many parents are quite surprised about how much they are expected to contribute to their kids’ college costs. Dale writes, "This is referred to as their Expected Family Contribution (EFC). What typically happens is that parents bumble along (I know we did) until their child is a junior in HS and then they go through the process of applying to colleges and for financial aid at the FAFSA.gov website when WHAM >>>> - they get a reality check upside the head when it comes to how much the federal government thinks THEY can contribute toward attending school." I can imasgine there are MANY parents sitting in financial aid office with tears in their eyes over this. What can the schools or government could do to reduce this sticker shock when it comes to EFCs?

The last two years have seen a decrease in business loans from lending institutions, despite the best efforts of the government and other organizations that assist businesses with securing financing. Below are some articles that can help you secure a loan for your small business. Come Prepared - Small businesses can improve the chances of getting a bank loan by laying the groundwork (The Albany Business Review) Trust Me - For entrepreneurs looking to gain credibility, it's often the little things that count (The Wall Street Journal) How to secure financing for your small business (SmallBusiness.com)

Jeff Boyce, who sits on the New York SBDC Advisory Board, forwarded a link to a new report found on the Kauffman Foundation website. It's called The Capital Structure: Decisions of New Firms . It's 20 pages long, and was generated by using data from Kauffman's Firm Survey. From its Abstract: "This paper investigates the capital structure choices that firms make in their initial year of operations . . . Contrary to many accounts of startup activity, the firms in our data rely heavily on external debt sources as bank financing, and less heavily on friends and family-based funding sources." Later in the report, "external debt sources" is defined to include local bank financing, as well as that of credit cards. There's a lot more to the report, but I invite you to read it. As Jeff mentioned in his accompanying email, "This recent Kauffman Foundation report underscores the importance of microloan funds and small business lending operations like NY