Are you looking for ways to find new investors for your project? What if you could provide something better than a return. If you have ever been to a GDF seminar, then you know that the three major components to any funding deal are:
1. Job Creation
2. Provides Economic Development Activities
3. Shovel Ready
WASHINGTON: In a long awaited announcement several months late, the U.S. Treasury Department’s Community Development Financial Institutions Fund (CDFI Fund) announced more than $3.5 billion in New Markets Tax Credit awards aimed at stimulating investment and economic growth in low-income urban neighborhoods and rural communities nationwide. A total of 76 organizations (Allocatees) across the country will receive tax credit allocation authority under the 2014 round of the New Markets Tax Credit Program.
WASHINGTON - The US Department of Agriculture announced the launch of two new private funds, known as Rural Business Investment Companies (RBICs), which make equity investments in rural businesses, helping them grow and create jobs. This announcement is part of USDA's ongoing efforts to help attract private sector capital to investment opportunities in rural America to help drive more economic growth in rural communities.
By: Ari Page
I never advocate that anyone borrow just to borrow. But if you need capital to make payroll or invest in something that you know will reap a short-term profit, then you need access to capital. In the past few years, even though money has been tight, there have always been options. Banks always need to lend to stay in business. You just need to know where to look.
Act I: Grandmother Isn’t Always Right
One of Steve Martin’s earliest routines went something like this. “I’ll never forget what my grandmother taught me. She said ‘Always…,’ no wait, ‘Never…,’ no it was, ‘Always…take a litter bag in your car. It doesn’t take up much room and when it gets full you can just toss it out the window.’”
That comes to mind when I hear people say things like, “Never…amass credit card debt.” If you can get better terms on a credit card than on a bank loan or a mortgage, than heck yeah you should amass credit card debt. If you borrow on a credit card at X% interest and make Y% with that money, where Y is greater than X, then let’s do that all day long!
And guess what. Ever since the current economic outlook improved and the market eased up, banks have been looking various ways to increase their earnings. Banks and federal associations are not quite as anal in their approach to risk, and want to find ways to generate some more business. The result is that some avenues of acquiring financing are now easier than ever.
One of the easiest, and, if done correctly, least expensive ways to get financing is via credit cards. I know this flies in the face of everything we’ve ever been told. Sure, many credit card companies still charge near-usurious interest rates, and most of us would be hard-pressed to make good use of capital at 20% and higher interest. But guess what. There are thousands of credit card offers at favorable rates for small businesses.
In fact, when the Office of the Comptroller of the Currency released their 19th annual “Survey of Credit Underwriting Practices” during the period ending June 30, 2013, they reported that among all loan products, credit cards had the greatest easing of underwriting standards.
Act II: Sometimes Things Too Good to Be True Are, in Fact, True
You’ve gotten another no interest credit card offer in the mail. “Sure,” you sardonically think. “Add in those hidden fees and crazy post-promotional-period interest rates and I’ll be giving them my house, car and boat in 12 months.”
But many of these offers are bonafide, great deals! And if you can benefit from access to financing, you should jump on these.
“But how does that even make sense for the bank?” you might say. Excellent question. The thing is, if banks don’t lend money, they don’t make money. Banks themselves can borrow at historic lows (they borrow at near zero percent from the Federal Reserve!), so they have access to lots of capital. Add this to the notion that banks have a lot of ways to make money, and you can start to see how this makes sense.
Banks want to have a relationship with you - and if they already have a relationship with you, they want to surround you with services that will keep you from going to the competition. So, providing you with great credit card offers costs them very little, and allows them to start shoving other promotions into your mailbox.
Moreover, although many zero percent interest terms appear to be capped, I am here to tell you unequivocally that if you know what you’re doing, that’s just not the case. Banks hope you’re not savvy enough to realize that if you know who to talk to and what to say, you can keep rolling over zero interest introductory offers for the foreseeable future. Business owners are the “crème de la crème” in the banking community and can take advantage of special promotional codes and techniques that aren’t available to the regular borrower.
Act III: Get Some
Here are some things you can do to take advantage of low- and zero-interest credit cards.
1. If you don’t have a business entity, get one. It’s easy to acquire and anyone can do it. You want to be smart about it, as some entities are far more lendable than others. For example, having Marketing/Advertising or Business Management in your business name, indicates you are (on average) a better risk than someone with Real Estate in their title. There are also important nuances in terms of what type of entity you set up.
2. Know how to elucidate what your business does. If you’re stuttering, stammering or seem unsure of your business, don’t expect the bank to lend to you.
3. If you have personal credit issues, get them cleaned up. There are many agencies, such as Kaydem Credit Help, that can assist you.
4. Search the web for credit card offers for businesses.
5. Do your homework to sort through various offers, identifying any hidden fees.
6. Explore existing relationships and see what they’re willing to do. I once went to my bank to open up a checking account and was offered a $17,000 credit card for being a loyal customer.
7. Consider requesting line increases or exploring promotional rates for those cards that you already have. Many banks won’t hesitate to reward good customers with increased credit lines.
Ari Page is CEO of Credit Card Builders, a company that helps small businesses raise unsecured, zero percent business financing. A voracious reader, Ari constantly scours the market for new techniques and strategies to identify creative and profitable borrowing strategies. Because of his unique insight and approach, Credit Card Builders has raised millions in funding for small businesses nationwide, with the average amount ranging from between $50,000 and $250,000.
On Wednesday, I’m hosting a free webinar with Ari about how you can get business funding.
Register For Free Webinar:
“How to Get $25,000 - $250,000
To Start or Grow Your Business”
Make sure to Register and reserve your spot on the webinar training before it fills up (space is limited).
Join me Wednesday 3/4, for a free webinar:
WASHINGTON – The head of the U.S. Small Business Administration (SBA) announced that for the second year, the SBA is launching an Accelerator Growth Fund competition for accelerators and other entrepreneurial ecosystem models to compete for monetary prizes of $50,000 each, totaling $4 million. The application period is from April 10-June 1 and information about the application process can be found at: www.sba.gov.
“We’re launching a second Accelerator Growth Fund competition to spur even greater opportunities for America’s small businesses,” said SBA Administrator Maria Contreras-Sweet. “Last year’s event was so successful, we’re looking forward to discovering and empowering the next trailblazers. Accelerators provide valuable resources to potential startups: a physical infrastructure to work in their infancy, mentoring, business-plan assistance, networking, opportunities to obtain venture capital, and introductions to potential customers, partners and suppliers—all critical elements to ensuring that small businesses flourish and succeed.”
Similar to last year’s competition, several panels containing expert judges from the private and public sector with collective experience in early stage investing, entrepreneurship, academia, start-ups and economic development will select the winners. The competition includes accelerators, incubators, co-working startup communities, shared tinker-spaces or other models. The panel will give particular attention to, applicants that fill geographic gaps in the accelerator and entrepreneurial ecosystem space.
Through this competition, the SBA is looking to support the development of accelerators and their support of startups in parts of the country where there are fewer conventional sources of access to capital (i.e., venture capital and other investors).
In addition, the SBA is also seeking accelerators headed by women and those that support them or other underrepresented groups. Thirty-two percent of last year’s accelerator winners were run by women and 14 percent were classified as underrepresented groups.
Manufacturing accelerator models will be given special consideration during this year’s competition, because they are critical to job growth and strengthening the nation’s economy.
Please click here for the Accelerator Growth Fact Sheet and specifics on how to apply and the timeline for 2015’s competition.
WASHINGTON–The U.S. Small Business Administration (SBA) announced today that the Impact Investment Fund of the Small Business Investment Company (SBIC) program has tripled in the last 12 months.
“Capital investment in some sectors, geographies and industries is still lower than you would expect and like. Through the Impact Investment Fund, we’ve sent a message to professional fund managers with expertise in areas like clean energy, education technology, and advanced manufacturing as well as those looking for 'off the beaten path' gems in low income or economic distressed communities across the country. SBICs as a whole, fill capital formation gaps at the low end of the middle market, the Impact Fund, puts a magnifying glass where the gaps are widest," said SBA Associate Administrator for Investment and Innovation Javier Saade.
The SBA began 2014 with two Impact SBICs managing $182 million and ended the year with six Impact SBICs collectively managing between $442 million and $572 million in total assets depending on the amount of credit guarantees approved and employed. Given the SBIC Impact Investment Fund is still well below the originally expected $1 billion leverage level, there is room to further grow the list of professional investors interested in pursuing impact strategies.
Three of the six Impact SBICs have not deployed capital. The other three have invested in 33 companies across the country and collectively employ approximately 4,600 people. These companies include an organic cage-free poultry operation in Texas, a wood waste-to-pellet fuel concern in Michigan and an educational institution in an urban low-income community in Puerto Rico.
One of the policy changes made was seemingly simple but equally meaningful – the Impact Investing Initiative became the Impact Investment Fund, making it a permanent feature of the SBIC Program. The Fund uses the rapidly evolving strategies that involve marrying financial gains and intentional social returns to narrow gaps.
Initially, SBIC’s were limited to SBA-identified impact investments, but now because of the flexibility of the Impact Investment Fund, participating funds can identify and pursue their own strategies. In addition to the expansion of this fund, SBA removed several key barriers that prevented access to it by:
- Lifting the $200 million restriction to offer licensed Impact SBICs better access to leverage;
- Removing the waiting period in accessing multiple leverage commitments; and
- Permitting existing SBICs to opt-in if they meet the Impact Fund requirements.
The reasons for the relatively slow deployment of impact investing strategies at the institutional level are varied and complex, but one of the main reasons, is the adoption of standards to measure intentional social impact has been spotty. The SBA and the federal government, supports the adoption of standards to further enable more institutional private capital flow to the small business community.
Information on the fund and the policy can be found here. The changes were made based on feedback from a significant number of private sector stakeholders and were consistent with themes the SBA heard from impact investors the White House roundtable on Impact Investing that was held this past summer. The comments align with the recommendations of the US National Advisory Board on Impact Investing released this summer and with the findings of the G8 Task Force on Social Impact Investing, Impact Investment: The Invisible Heart of Markets.
The six Impact SBICs are:
|2011||Michigan Growth Capital Partners SBIC, LP|
|2012||SJF Ventures III, LP|
|2014||Bridges Ventures U.S. Sustainable Growth Fund, LP|
|2014||Morgan Stanley Impact Fund|
|2014||Bluehenge Secured Debt SBIC, LP|
|2014*||Renovus Capital Partners, LP|
MCLEAN, VA--- Freddie Mac announced today that it had another strong year with $28.3 billion in loan purchase and bond guarantee volume for its multifamily business in 2014, up 10 percent from $25.9 billion the previous year. This was the second largest year of multifamily purchases in the company's history.
New business volume reflects $25.8 billion of our $25.9 billion purchase cap for 2014 established by Freddie Mac's conservator, the Federal Housing Finance Agency (FHFA). In addition, new business volume not subject to the FHFA purchase cap totaled $2.5 billion and included certain affordable housing loans, loans for smaller multifamily properties, and loans for manufactured housing communities.
Quotes from David Brickman, executive vice president of Freddie Mac Multifamily:
- "We used 99.9 percent of our $25.9 billion volume cap for 2014 mortgage purchases by expanding our market presence and improving our market position as a leading multifamily debt capital provider in the U.S."
- "We are on a roll and growing by serving more markets including manufactured housing communities and smaller apartment communities. Our financing also increased for class B&C properties, as well as for those in secondary and tertiary markets due to rising demand for rental housing throughout the U.S."
- "We expect to have another year of double digit percent growth in our new business volume given that our volume cap for 2015 has been increased by 16 percent to $30 billion and we expect to increase our activity in uncapped products, particularly small property loans."
Freddie Mac Multifamily 2014 Business Highlights:
- Generated nearly $1.2 billion in total comprehensive income through the first three quarters.(Fourth quarter 2014 earnings data has not yet been released).
- Executed 21 Multifamily securities offerings in 2014 for a total transactions volume of $22.4 billion which, in addition to K-Deals, included a small volume of other securities, including the company's Q- and M-Deals.
- Issued $21.3 billion in K-Deals in 2014 and securitized almost $93 billion in multifamily loans since the program started in 2009, backing approximately $79 billion in guaranteed certificates and almost $14 billion in unguaranteed certificates.
- Settled roughly $2.7 billion in targeted affordable housing business of which approximately $1.4 billion were multifamily bond credit enhancements and Tax-Exempt Bond Securitizations (TEBS).
- Purchased just over $1.2 billion in seniors housing mortgages.
- Transacted close to $1.3 billion in student housing loans.
- Continued to provide a consistent source of liquidity to support affordable rental housing nationwide. Approximately 90 percent of the apartment units Freddie Mac finances are affordable to households earning up to the area median income, and most of those loans are securitized.
- Provided financing for nearly 1,800 properties amounting to almost 427,000 apartment units, of which the majority are affordable to families earning low or moderate incomes.
- Provided additional liquidity to more underserved markets by launching new initiatives to provide financing for Small Balance Loans and Manufactured Housing Community loans.
- Reported a low delinquency rate of 4 basis points as of December 31, 2014, reflecting our continued strong portfolio performance.
Click here to read the 2013 business volume press release.
Since the launch of Freddie Mac's multifamily business in 1993, it has provided more than $344 billion in financing for about 63,000 multifamily properties.
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four home borrowers and is one of the largest sources of financing for multifamily housing.
The U.S. Small Business Administration announced today that it will open Disaster Loan Outreach Centers (DLOC) in West Seneca on Wednesday, Jan. 7, 2015, and in Attica on Wednesday, Jan. 14, 2015. The location of the DLOCs will make it convenient for those affected by the severe winter storm that occurred Nov. 19 – 26, 2014 to apply for disaster loan assistance.
The declaration covers Erie County and the adjacent counties of Cattaraugus, Chautauqua, Genesee, Niagara, and Wyoming in New York.
Low-interest federal disaster loans are available to California residents and business owners affected by the severe storms and flooding that occurred December 11‑12, 2014, U. S. Small Business Administration (SBA) Administrator Maria Contreras-Sweet announced today. SBA acted under its own authority to declare a disaster in response to a request SBA received from Gov. Edmund G. Brown Jr.’s designated representative, Mark S. Ghilarducci, Director of the Governor’s Office of Emergency Services, on December 24.
The disaster declaration makes SBA assistance available in San Mateo County and in the neighboring counties of Alameda, San Francisco, Santa Clara and Santa Cruz.
“Low-interest federal disaster loans are available to homeowners, renters, businesses of all sizes and private nonprofit organizations whose property was damaged or destroyed by this disaster,” said SBA’s San Francisco District Director Mark Quinn. “Beginning Monday, January 5, SBA representatives will be on hand at the following Disaster Loan Outreach Center to answer questions about SBA’s disaster loan program, explain the application process and help each individual complete their application,” Quinn continued.
Small, nonfarm businesses in the Arkansas counties of Crittenden, Cross, Lee, Monroe, Saint Francis and Woodruff are now eligible to apply for low‑interest federal disaster loans from the U. S. Small Business Administration (SBA). These loans offset economic losses because of reduced revenues caused by the hail in Saint Francis County that occurred October 2, 2014, announced Tanya N. Garfield, Director of SBA’s Disaster Field Operations Center ‑ West.
IOWA & NEBRASKA
Small, nonfarm businesses in five Iowa counties and neighboring counties in Nebraska are now eligible to apply for low‑interest federal disaster loans from the U. S. Small Business Administration (SBA). These loans offset economic losses because of reduced revenues caused by the freeze in the following primary county that occurred on May 16, 2014, announced Tanya N. Garfield, Director of SBA’s Disaster Field Operations Center - West.
Primary Iowa County: Harrison;
Neighboring Iowa counties: Crawford, Monona, Pottawattamie and Shelby;
Neighboring Nebraska counties: Burt and Washington.
“SBA eligibility covers both the economic impacts on businesses dependent on farmers and ranchers that have suffered agricultural production losses caused by the disaster and businesses directly impacted by the disaster,” Garfield said.
Small, nonfarm businesses, small agricultural cooperatives, small businesses engaged in aquaculture and most private nonprofit organizations of any size may qualify for Economic Injury Disaster Loans (EIDLs) of up to $2 million to help meet financial obligations and operating expenses which could have been met had the disaster not occurred.
“Eligibility for these loans is based on the financial impact of the disaster only and not on any actual property damage. These loans have an interest rate of 4 percent for businesses and 2.625 percent for private nonprofit organizations, a maximum term of 30 years, and are available to small businesses and most private nonprofits without the financial ability to offset the adverse impact without hardship,” Garfield said.
By law, SBA makes EIDLs available when the U. S. Secretary of Agriculture designates an agricultural disaster. Secretary Tom Vilsack declared this disaster on December 24, 2014.
Businesses primarily engaged in farming or ranching are not eligible for SBA disaster assistance. Agricultural enterprises should contact the Farm Services Agency (FSA) about the U. S. Department of Agriculture (USDA) assistance made available by the Secretary’s declaration.
Applicants may apply online using the Electronic Loan Application (ELA) via SBA’s secure Web site at https://disasterloan.sba.gov/ela.
The Federal Housing Finance Agency (FHFA) today directed Fannie Mae and Freddie Mac to begin setting aside and allocating funds to the Housing Trust Fund and the Capital Magnet Fund pursuant to the Housing and Economic Recovery Act of 2008 (HERA). HERA authorized FHFA to temporarily suspend these allocations, and FHFA informed Fannie Mae and Freddie Mac of a temporary suspension on November 13, 2008. In letters sent today (links below), FHFA notified Fannie Mae and Freddie Mac of the agency’s decision to reverse the temporary suspension.
Separately, FHFA sent to the Federal Register an Interim Final Rule to address the statutory requirement that the allocations may not result in transferring their expense to originators or other Enterprise counterparties. The Interim Final rule is effective upon publication and has a 30-day comment period.
WASHINGTON – The U.S. Small Business Administration 7(a) Loan Program reached a lending record in 2014, as announced today by SBA Administrator Maria Contreras-Sweet. By the end of the fiscal year (Sept. 30), SBA had approved 52,044 7(a) loans for $19.19 billion, an increase of 12 percent in number loans and 7.4 percent in dollar amount over fiscal year 2013.
The 7(a) program is designed to provide small businesses with the most comprehensive type of financial assistance to cover the vast majority of business expenses, such as short and long-term working capital, exports, and refinancing existing debt under certain conditions.
“As our economy continues to grow and recover, small businesses are the essential fuel to that continued growth,” said Contreras-Sweet. “Thanks to the hard work and outreach by our lending partners, SBA staff, and our resource partners, as well as the small business owners themselves, we have been able to put more capital into the hands of our nation’s entrepreneurs. We know that America’s small businesses pack the biggest punch, creating two out of every three net new private sector jobs in the U.S. These small businesses are the cornerstone of our communities, so their success and expansion is vital to the nation’s economic growth.”
SBA had been authorized $17.5 billion in the FY 2014 lending program. It became clear that lending would exceed that amount; therefore the agency secured an increase for the 7(a) program in the Continuing Resolution that was approved in mid-September.
Other SBA loans that did well in fiscal 2014 were those $150,000 and under. Spurred by the fee relief implemented at the beginning of the fiscal year (fees were set to zero), these loans saw an increase of 23 percent in number of loans (30,675) and 29 percent in approved dollars ($1.86 billion) over fiscal year 2013 (24,923 and $1.44 billion respectively).
Fee relief was also instrumental in helping veteran small business owners through the Veteran Advantage initiative (zero fees on loans $150,000 to $350,000 to veterans.) Fee relief for veterans began January 1, 2014, and by the end of the fiscal year amounted to $610,000. Fee relief for both loans $150,000 and under, and for Veterans Advantage, was extended through fiscal year 2015.
Small businesses reflect the dynamic demographics of the United States. In FY 2014, the number of SBA loans to African Americans grew by roughly 36 percent over the previous year. For Hispanics and women, there was an increase of 14 percent for each group.
In our efforts to reach out and help small businesses across the nation, lenders play an important role as partners, as it is through them that SBA financial assistance is channeled and managed. In FY 2014, SBA added 308 new lenders that, collectively, made 684 loans for nearly $317 million.
As exports continue to play a pivotal role in strengthening the nation’s economy, SBA loans to exporters grew by 3.7 percent in number of loans and 12 percent in dollar amount over last year.
One of the ways in which SBA helps small businesses is through providing essential bid and performance bonds to small contractors, which allows these small businesses to be more competitive when bidding on contracts, be they with the government or the private sector. In fiscal year 2014, SBA Office of Surety Bond Program saw an increase of four percent in total contract value, from $6.168 billion in FY 2013 to $6.413 billion in FY 2014. Total bond contract amount also grew from $1.262 billion in FY 2013 to $1.358 in FY 2014, an increase of eight percent.