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Beyond Bankruptcy: Does the Bankruptcy Code Provide A Fresh Start to Entrepreneurs?

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MBDA

Beyond Bankruptcy ReportSmall businesses that have previously filed for bankruptcy are no more burdened than other small firms by poor cash flow, high health insurance costs, or excessive taxes, and they attain similar firm sizes, according to a study released today by the U.S. Small Business Administration’s Office of Advocacy. However, they have about a 24 percent higher likelihood of being denied a loan and are charged interest rates at least 1 percent higher than other firms. The report finds that firms owned by African and Latino Americans are even more likely to be denied loans and charged higher interest rates.
 
“Small businesses filing for bankruptcy have an opportunity for a new start. This new start is hampered by the challenges of obtaining new loans. This can impede innovation and job creation,” said Chief Counsel for Advocacy Winslow Sargeant.
 

Educational Videos by SBA, INC. & ATT Promote Exports by U.S. Firms

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MBDA

Exporting Small businesses seeking to grow their businesses and create jobs through exporting can turn to new, free educational videos created through a partnership between the U.S. Small Business Administration, Inc. Magazine and AT&T.

Through the public-private partnership, a series of video modules has been developed to inspire and encourage American small businesses to actively pursue exporting and to educate them on how to do so.

SBA Opens Temporary Refinancing Program to Real Estate Mortgages Maturing after December 2012

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MBDA

WASHINGTON, D.C. – Small business owners with eligible commercial real estate mortgages maturing after Dec. 31, 2012, will be able to secure more stable, long-term financing through the U.S. Small Business Administration’s temporary 504 refinancing program as a result of a change that will be published in The Federal Register by April 6.

In February, SBA implemented a temporary refinancing program enacted under the Small Business Jobs Act of 2010, which allowed small businesses facing maturing commercial real estate mortgages or balloon payments before Dec. 31, 2012, to refinance with an SBA 504 loan. The SBA change will lift the date limitation and will allow more small businesses to secure stable, long-term financing and avoid potential foreclosure on mortgages approved before and during the recession that were based on inflated real estate values.

“With the collapse of the real estate bubble, many small business owners have found themselves unable to refinance as a result of inflated real estate values at the time they took out their mortgage,” SBA Administrator Karen Mills said. “SBA’s temporary 504 refinancing program was first made available to those small businesses with the most immediate need. Today’s step opens this critical assistance to more small businesses, giving them the opportunity to restructure their debt and free up capital that will be essential to keeping their doors open and also their future ability to grow and create jobs.”  
 

Surety Bond Rule Changes for Disaster Areas

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MBDA

WASHINGTON – The U.S. Small Business Administration has made regulatory changes to its Surety Bond Guarantee (SBG) program, including higher surety bond guarantee limits that will help construction and service sector firms secure larger contracts for work in areas impacted by disasters.

The changes are related to the Small Business Disaster Response and Loan Improvements Act of 2008, which increases the eligible amount for contracts or orders related to a major disaster area. 

The changes, which were originally published as part of a Proposed Rule in The Federal Register in April 2010, are now final and include:

A Call to Action to Grow the Size, Scale and Capacity of Small and Minority-Owned Firms

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David Hinson, National Director

National Director David Hinson

In honor of Women’s History Month and in recognition of the new statistics on firms owned by American Indians and Alaskan Natives, this edition of MBDA’s newsletter features an inspiring storing about Sister Sky—a firm owned and operated by two sisters from the Spokane tribe in Eastern Washington.  As I travel around the country, I am in awe of the innovation, tenacity, and the indomitable spirit of minority business owners and their unwillingness to quit in the face of overwhelming odds. That’s the spirit that makes America great.

With the release the 2007 Survey of Business Owners data by the Census Bureau and MBDA’s American Indian and Alaskan Native Business Fact Sheet, we have evidence that there was growth in the number of American Indian and Alaskan Native-owned firms since 2002.  Yet, job creation by these firms has not materialized and the average gross receipts of American Indian and Alaskan Native-owned firms ($145,000) are significantly below average compared to non-minority firms ($490,000). 

Still, of the 237,000 American Indian and Alaskan Native-owned firms that generate more than $34.0 billion in gross receipts, there are more than 4,600 that produce $1.0 million dollars or more in revenue.  These firms combined generated gross receipts of $23 billion and employed 116,759 workers.  Clearly, there is an upside to building your firm to size, scale and capacity.  Sister Sky, along with their commitment to creating jobs on the Spokane reservation, and with the support of MBDA and other federal partners, is headed in the right direction.

Did you know...

Between 2002 and 2007, minority-owned firms outpaced the growth of non-minority firms in gross receipts, employment, and number of firms. Minority firms are an engine of job creation.
Graph for MBE Growth

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