Posted by: Amy S. Choi on November 23
Last spring, I wrote about how small business owners in Merced County, Calif., were pushing to jump start the local economy. I recently heard from one of those entrepreneurs, Ken Myers, owner of Delhi Mini Storage. I was inspired by his spirit, and hope you are too.
Six months since I met him, Myers has seen his business pick up, and his new two-year-old storage facility has grown to 34% occupied from 18%. But his bank has informed him that his $4.2 million construction loan, which was originally supposed to be rolled over into a 30-year loan in June 2010, will not be refinanced. “So our business is improving,” says Myers, “but I’ll still probably lose it all.” In order to save his company, Myers is considering selling one of his two storage buildings and is trying to secure funds to build a billboard on his property, which he hopes will generate advertising income.
To make ends meet in the meantime, he’s taken a job driving 18-wheelers for a local trucking company while his wife and daughter run the office. Myers knows that without refinancing help from the banks he will lose his business. It seems unlikely to happen anytime soon. But he still hasn’t soured on entrepreneurship. “I’m 52 years old, but I can drive a truck and save some money,” he says. “If I lose this business I’ll start a new company. It won’t be as easy as it was 30 years ago, but I can still do it.”
Posted by: John Tozzi on November 19
Geithner calls on bailed-out banks to increase lending to small businesses, Meena Thiruvengadam writes in the WSJ.
Small business owners should think twice before skimping on holiday gifts to clients, the AP's Joyce Rosenberg writes.
Sen. Mary Landrieu (D-La.) says Congress must get health reform right for small businesses, David Herszenhorn reports at the NYTimes Prescriptions blog.
And Time's Janet Morrisey finds small business left out of the recovery.
Posted by: John Tozzi on November 18
1,200 job applications for nine openings: How small firms handle hiring in today's job market, by the WSJ's Emily Maltby.
Sen. Carl Levin (D-Mich.) floats another small business loan program.
Despite the focus on access to credit, weak demand is the biggest problem small business owners report, Anita Campbell writes at Small Business Trends.
Small firms in New York state drop health care en masse, Barbara Benson writes in Crain's New York.
Health insurance plans designed for freelancers may not fit into the insurance exchanges reformers propose, David Whelan reports at Forbes.
Posted by: John Tozzi on November 18
Nouriel Roubini, the NYU economist who accurately predicted the financial meltdown, writes an important commentary in The Globe and Mail about two disparate American economies: "There is a smaller one that is slowly recovering and a larger one that is still in a deep and persistent downturn," he says.
Still mired in the recession are small firms and the millions of unemployed and underemployed. Incomplete or lagging data, he suggests, distorts the perception of how well the economy is doing:
And, while data from firms suggest that job losses in the past three months were about 600,000, household surveys, which include self-employed workers and small entrepreneurs, suggest a number above two million.
He also echoes Fed Chairman Ben Bernanke's analysis that credit is restored for corporations with access to capital markets but not for others:
And the credit crunch for non-investment-grade firms and smaller firms, which rely mostly on access to bank loans rather than capital markets, is still severe.
Or consider bankruptcies and defaults by households and firms. Larger firms – even those with large debt problems – can refinance their excessive liabilities in or out of court, but an unprecedented number of small businesses are going bankrupt. The same holds for households, with millions of weaker and poorer borrowers defaulting on mortgages, credit cards, auto loans, student loans and other consumer credit.
Consider also what is happening to private consumption and retail sales. Recent monthly figures suggest a rise in retail sales. But, because the official statistics capture mostly sales by larger retailers and exclude the fall by hundreds of thousands of smaller stores and businesses that have failed, consumption looks better than it really is.
While we likely have to wait for more data, there seems to be an emerging theme that the economy most small firms inhabit is diverging from the economy that firms with access to stock and bond markets inhabit. Roubini's essay expands on an idea advanced last week by Goldman Sachs economist Jan Hatzius that found small business sentiment (as measured by the NFIB's index) out of line with other measures of the economy, like GDP.
In our post about Hatzius's report, we asked readers who have weathered other recessions whether this recovery feels different. One, Jeff Goldberg, left this comment:
My experience is we had credit available in the early 1990's. This time it has all but dried up. With no credit it is difficult to wiggle. We therefore have laid off 2 people and are hoping for some type of holiday season to pull us through.
Read Roubini's full piece here. And let us know where it feels like your business operates -- in the economy that's recovering, or the one that isn't.
Posted by: John Tozzi on November 17
Robbers and burglars are moving beyond traditional cash-heavy targets to hit professional offices, suggests Sarah Needleman in the WSJ.
Small business lending from bailed out banks is down 4% or $10 billion in six months, reports Catherine Clifford at CNNMoney.
The White House hosts a roundtable on small business financing with Treasury Dept. and Small Business Administration set for tomorrow. Treasury Secretary Timothy Geithner and SBA Administrator Karen Mills are scheduled to be there. Deborah Soloman of the WSJ has more.
More and more businesses are built on lead generation, Steve King writes at Small Business Labs, from Google to social games.
Four key elements to boosting local search rank, via Lisa Barone at Small Business Trends.
