Tag Archives: sba

The SBA and Betide | Jim Ely

betide

bi-TYD

To happen.

From Old English tidan (happen), from tid (time).

Betide is often shortened to tide or tidings.  Such as when Luis Van Pelt declared in a Charlie Brown Christmas: “Fear not: for, behold, I bring you good tidings of great joy!”

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TIP OF THE WEEK

Good tidings for the restaurant industry.

Driven by stronger sales and traffic and a more optimistic outlook among restaurant operators, the National Restaurant Association’s Restaurant Performance Index (RPI) posted a solid gain in October. The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 102.8 in October, up 1.8 percent from its September level. In addition, the RPI stood above 100 for the 20th consecutive month, which signifies expansion in the index of key industry indicators.

According to the SBA, restaurants obtain more SBA 7(a) loans that any other business type.

If you would like a copy of the National Restaurant Association’s Restaurant Performance Index for October let me know.

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Weekly Economic Update | LAEDC

This Week’s Headlines:

Goodwill is a Good Thing | Business-Valuation.biz

As suggested earlier, there are multiple interpretations of goodwill which extend beyond the SBA’s formulaic definition of “Selling Price Less Book Value of Acquired TangibleAssets”. Although there is some consistency between new GAAP rules on goodwill accounting, the IRS’ “residual method” and this “formula” method, the general shortcoming with the line of thinking put forth by the SBA to restrict or monitor goodwill-based lending is that goodwill should NOT be considered a negative feature or outcome or the reason why businesses default on their loans To the contrary, only successful firms will generate the profits needed to foster the presence of substantial goodwill however defined. In fact, the more profitable successful a firm becomes, the greater the firm’s goodwill value becomes all other things equal. The more profitable an asset-heavy manufacturing firm becomes, the greater the portion of value that is attributed to goodwill – is this a bad thing? In short, “goodwill” is a “good thing”.

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The SBA Does Not Loan Money | Peter Mehit

The SBA Does Not Loan Money

 Q. Should I get a loan from the SBA?

A. You can’t get a loan from the SBA, but you can get a SBA loan guarantee.

Come again?

Well, first off, the SBA does not loan money, so you can’t get a loan from the SBA.  Only banks loan money.  The SBA writes guarantees to limit the losses a bank will experience if your loan goes bad.  This is important to know, because it means you will have to qualify under the bank’s rules.

These can be very different from the SBA’s.  For example, it is not a requirement for you to collateralize the full loan amount to get an SBA guarantee.  Under SBA rules if you run out of assets, but have pledged what you have available, you can be approved.  Right now, we know of no bank that will make a loan without collateral equal to our greater than the amount you’re borrowing.

Each bank’s rules are slightly different, with the large banks having the most restrictive and the local and regional banks being the most liberal.

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Weekly Business Update | LAEDC

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THIS WEEK’S HEADLINES:

Weekly Economic Update | LADEC

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THIS WEEK’S HEADLINES:

The SBA Offers Sweeteners to Encourage More Small Loans | Businessweek

The changes mean small business owners borrowing $150,000 will no longer have to come up with $2,550 in upfront fees at the time the loan closes.

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