NASE on Micro-Business

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When talking about those small, rectangular pieces of plastic you keep in your wallet, many people use these words interchangeably.  However, as this informative Small Business Trends article shows, these words can mean a big difference to you and your business.  Check out the considerations that author Adam Jusko outlines in the article to make sure you’re choosing the right card for you.

Hat tip: Small Business Trends

President Barack Obama spoke via ABC News’ “Nightline” to Americans about health care reform during a special edition of the program from the White House on June 24, 2009. The President specifically addressed the concerns of the self-employed and small business owners in response to a question from Gary Cloutier, a self-employed body shop owner from Massachusetts, who is currently unable to afford health insurance.

President Obama’s comments on the self-employed and health care reform start at the 4:00 mark of this video clip of the interview.

The other clips of the interview are also well worth watching!

Volunteering makes you feel good, and according to this Small Business Trends article, it can also be good for your business.  From giving business to other small business owners to teaching your skills to people in your community, author Lisa Barone suggests a bunch of great ways to make new connections, which could lead to new business.

What kinds of things have you done in your community lately?  Have these activities led to new business or contacts?

[Hat tip: Small Business Trends]

As all small-business owners know, access to capital and credit is important to running a business.  However, the economic downturn has made access almost unattainable as banks are tightening lending standards and cutting lines of credit.

According to the National Small Business Association, 59 percent of small businesses were relying on credit cards to help finance their day-to-day operations as of April, up from 44 percent at the end of 2008.  Small-business owners have also been spending more on their credit cards, making up 11 percent of revenue for Visa and MasterCard today from 3 percent of revenue in 1998 according to the Nilson Report as cited by The New York Times.

Despite the large numbers of small business owners using credit cards, and the amounts they are spending on these cards, three-quarters say they have experienced a large decrease in credit limits over the last six months.  Small businesses were not included in the Credit Cardholder’s Bill of Rights legislation signed into law in May by President Barack Obama.  That legislation limits excessive fees and interest rate increases on existing balances beginning in 2010.

Credit card companies say they have had to restrict credit to small businesses because of rising defaults and uncertainty, but as banks cut credit limits, the credit scores of small businesses are hurt as well, making it even harder to get other types of credit.

Tighter lending standards mean higher credit scores are necessary to qualify for loans.  Despite some various entertaining commercials on television, according to this Washington Post article, getting an accurate credit score is confusing and expensive.

Most lenders base your creditworthiness on your FICO score, which is calculated from information in credit reports from the three major bureaus, TransUnion, Experian and Equifax.  Experian and TransUnion have developed their own “educational scores” that consumers can access by paying $14.95 per month for a credit-monitoring service, however the fine print reveals these scores are not the same as a FICO score.  Equifax gives FICO scores to anyone paying $14.95 per month for its credit-monitoring service.  Many consumers have found large discrepancies between the educational scores from these bureaus and the FICO score that most lenders use.

Consumers can access their FICO scores through Equifax.com or myFICO.com.  While nervewracking, if you have paid your bills on time, don’t have negative public records such as bankruptcies, and have used less than 30 percent of your available credit, you probably have a good credit score.

Do you monitor your credit score regularly?  Have you been surprised by differences between your educational score and your FICO score?

Hat tip: The New York Times, The Washington Post

Previously: Credit Card Bill Might Leave Small Businesses Out, New Credit Card Law Missing Micro-Biz Protections

What a busy day!  Awarding $30,000 to a deserving NASE Member and her business made for a hectic and exciting few hours here at the NASE offices today.  The staff at the NASE offices had the opportunity to meet our 2009 Achievement Award winner, Tiffany Washington, and her family this morning.  Tiffany’s parents, grandmothers, 3-year-old son, and Chantelle, the assistant she was able to hire because of how much her business grew from the NASE Business Development Grant she received in 2008, were all on hand to see Tiffany receive her big check.

NASE Staff and Tiffany with big check

Everyone was really excited to be here, and it was great to meet Tiffany and learn more about her and her business after only “getting to know her” from her grant application and interviews for the award.  We had a photographer and video crew in the office for the ceremony as well, so sometime soon you’ll be able to hear Tiffany’s thoughts on her small business, too.  For now, you can check out a video of last year’s Achievement Award winner, Sheri Novak of Hazlenut Kids, by clicking the “Business Development Grant” video in the NASE Media Player at this link or from the front page of the NASE Web site.

We wish our most heartfelt congratulations to Tiffany, and we are looking forward to see where the Achievement Award takes her and her business in the future.  As she said herself, “the grant gave me confidence to pursue larger goals and take my business further; but now with this award, the possibilities are just endless.”

As of Monday June 15, small businesses will begin accepting applications for loans from the America’s Recovery Capital (ARC) loan program.  The temporary program will provide loans up to $35,000 for viable small businesses with immediate financial hardship to allow these businesses to stay open while they get back on track.

ARC loans are deferred-payment loans for established, viable, for-profit small businesses in need of short-term assistance in making principle and interest payments on existing and qualifying business debt.  These loans have no associated SBA fees, are 100 percent guaranteed by the SBA and will be disbursed over a period of up to six months.

For more information, please visit SBA.gov.

While any parent would want to be sure that the toys their child is playing with are free of lead and other toxic chemicals, legislation passed to assist in the event of toy recall may put small-business owners out of business.

A provision of the Consumer Product Safety Improvement Act (CPSIA) requires that children’s products carry a label or permanent mark with manufacturing details.  However, many small toymakers and artisans are frustrated by the complexity of the regulation and may not be able to afford to comply, and the regulations may take effect as early as August.

(Hat tip: CNN Money/ Sharon McLoone @smallbizwatch)

Will the CSPIA labeling regulations impact your business?  Let us know in the comments.


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