Business financing these days is really not easy or have it been really easy?

Small businesses are experiencing a considerable drop in access to finance, research conducted by the Forum of Private Business (FPB) suggests.

Since November the FPB has regularly asked 150 small businesses, among its 22,000 members, how they are faring. This month a third said they have found it much harder to get finance in recent weeks and dissatisfaction with banks has also significantly increased.

The figures were passed to Panorama for Monday's programme on small businesses. In the programme, Credit Where It's Due, business guru and Dragons Den star Theo Paphitis looked at how small businesses were faring during the recession.

The above is quoted from BBC News. Well, is there something new to this? Business financing these days is really not easy or have it been really easy?

The stimulus package allocates $730 million to the SBA!

Time for some good news! According to Nancy Kaffer, the stimulus plan can help backed up SBA backed loan programs. Well, definitely this is good news. I quoted the news below.

U.S. Small Business Administration officials are hopeful the American Recovery and Reinvestment Act will breathe new life into the SBA-backed credit markets.

The stimulus package allocates $730 million to the SBA, and changes its programs in an effort to increase accessibility for small businesses.

The stimulus funding includes: $375 million for temporary fee reductions or eliminations on SBA loans and increased SBA guaranteed shares — up to 90 percent for certain loans; $255 million for a new loan program to help small businesses meet existing debt payments; $30 million for expanding SBA's microloan program, enough to finance up to $50 million in new lending and $24 million in technical assistance grants to microlenders; and $20 million for technology to streamline SBA's processes, according to an SBA statement.

The bill also allows the SBA to offer loan guarantees of up to 90 percent and provide deferred payment loans of up to $35,000 for qualified businesses to make payments on existing loans. And, it will allow business owners to refinance existing loans for fixed assets.

Source: Crain's Detroit Business

Breaking the Barriers of Lending

This time around, I need my readers' help on explaining to me what does the figure above means. Just click the image to zoom it in. Thanks in advance everyone!

Dell's O% Financing Program

I got a news from Brian White of BloggingStocks.Com, talking about Dell's O% Financing Program.

Dell, Inc. (NASDAQ: DELL) is taking a page from the auto industry, as the computer maker has introduced 0% financing for its small business customers. The world's second-largest computer maker already has the promotion available for large business customers, but now anyone purchasing at least $25,000 worth of equipment can finance their Dell purchase with no finance charges.

One of the semi-bright lights of the recession and economic turmoil currently in progress is that retailers and manufacturers both are being forced to finally become innovative in their marketing. In the PC industry, which is littered with commodity companies anyway, the innovation may not sit with the products themselves, but the surrounding services instead. This appears to be what Dell is after.

Dell's new 0% strategy here is to allow small business customers to make quarterly payments on new Dell equipment that they can then purchase at the end of three years for $1. The company will also offer a "no payments for 90 days" option for small business purchases that qualify. Although Dell's sales quagmire continues to exist, the company will have to continue to offer innovative and more aggressive programs like this to stay neck-and-neck with competitor Hewlett-Packard Corp. (NYSE: HPQ) and a recently resurgent Taiwanese competitor Acer.

Stimulus bills aim to revive SBA lending

According to MSNBC, the economic stimulus package working its way through Congress most likely will include steps to revive the Small Business Administration’s lending programs.

Many SBA lenders have dropped out of the program or severely cut back on lending. They cite two major problems with SBA loans: a frozen secondary market for the loans, which makes it harder for lenders to make new loans; and high fees and other costs that make SBA lending less profitable, especially since interest rates on these loans are capped.

Both the House and the Senate attempt to address these problems in their stimulus bills, but their solutions differ. The House bill would authorize the agency to make loans directly to small businesses, if SBA lenders pass on the deals. It also would increase the government guarantee on 7(a) loans to 95 percent, reducing the risk of making these loans.

The Senate bill focuses on temporary waivers of loan fees, in hopes of making the loans more attractive to borrowers and more profitable for lenders. It also would increase the maximum size of 7(a) loans from $2 million to $3 million in order to meet the needs of more small businesses.

Is it really possible? Will this really help? What do you think?