Great news coming out of a Citibank small business survey. The bank asked 188 small businesses in the Miami area and found that 55% of small businesses were optimistic that 2011 would be better for their business than 2010. 30% believed that this year would be the same as last, while a few small businesses believed that 2011 would be worse (15%).

This is great news because if small business feels comfortable with the economic outlook, then they will take additional risks, increase inventory and (hopefully) hire more employees. This, in turn, will be what turns our economy around, particularly in South Florida, which has been hit harder than most cities during this economic collapse.

Small businesses were primarily concerned with the cost of raw materials and high taxes. Hopefully the government is paying attention to the small business person’s concerns, and be willing to work with them to lower taxes.

Read the full article here.

Ah, corporate credit. I’ve been trying to help a few clients get loans for expansion and inventory needs. It’s been pretty tough. Banks have been very reluctant to lend any type of money, let alone a business loan. I don’t want to discourage anyone from applying for a loan, because it really depends on the nature of your business and your personal and corporate finances. At the very least, banks will ask for the following:

At least three years of financial data for the businessPersonal taxes of the shareholders/members/partners for the past three yearsProfit/loss statement for the company for three yearsSales for three years (the banks want to see a steady growth trajectory)A company balance sheetA personal balance sheet from the company’s ownersA business planA loan proposal

The best thing to do is to approach the bank where either you or your company bank with and talk with your personal banker. if you don’t have a personal banker, make an appointment with a loan officer.

Another good choice is to contact the local branch of the small business administration. While the SBA has been struggling lately, it is possible that they can point you to a bank in your area that specializes in small business loans.

If you want to establish some basic corporate credit quickly, you should have the company apply for an American Express business card or some other type of corporate credit card. If the credit score is an issue, ask if you can apply for a secured credit card. Note that this will not lead to an immediate loan, but will help establish credit moving forward.

Another option is to talk with your suppliers, and ask if you can pay in 30-60-90 day increments. This will allow you to develop credit with suppliers, and free up some of your cash for other projects or to acquire additional inventory.

I’ve spoken to a few loan officers to determine why certain loan applications have been rejected. The response I typically get is that banks don’t want to lend unless the company has lots of cash on hand, the owner/shareholder of the company signs a personal guarantee, and the owner can actually pay the guarantee. Basically, if you are going to ask for a $50k loan, then you need to have $50k in the bank. Of course, this varies on the bank. The loan officers have also said to just keep trying. They suggest that you approach a number of banks at the same time, and maybe you can pit one against the other. What you should not do is approach a bank that you have no relationship with, unless that bank was recommended by the SBA.

To summarize: best starting point- first, try the SBA; next, try your bank.

Article can also be found in Spanish at Inversionario.com

While the following article does not concern peer to peer lending with respect to business financing, it provides a good intro into peer to peer lending services.

http://www.tampabay.com/news/business/personalfinance/peer-to-peer-lending-has-yet-to-find-firm-footing/1151051

1. Incorporate your Business.  File articles of incorporation with the State.
2. Apply for an Employment Identification Number (EIN) for the Corporation
3. Prepare Corporate Bylaws
4. Name at least three corporate directors
5. Hold a Meeting of the Board of Directors
6. Draft a Conflict of Interest Policy
7. Apply for Nonprofit status by filling out IRS Form 1023 (there is an IRS filing fee ranging from $350 to $700 depending on the company’s estimated financials).
8. Communication with the IRS regarding said application.
9. Register your nonprofit status with the state of Florida; register the nonprofit with any other state where you intend to conduct fundraising activities in order to comply with fundraising regulations.
10. Begin fundraising

The whole process to get approval from the IRS takes between 3-6 months, sometimes longer, depending on the IRS case load. You can go ahead and prepare the nonprofit and get things started, market, etc., but you can’t begin fundraising until approval by the IRS and subsequent registration with the State.

If you have any additional questions or wish to create a nonprofit organization in Florida, please feel free to contact us at your convenience, at (305) 814-8299 or via email.