A new government report highlights just how difficult running a franchise business can be. It also shows that taxpayers can end up footing the bill for a lot of business failures. The report comes from the Government Accountability Office and shows that more than 40 percent of franchises from a single parent company defaulted on SBA guaranteed loans. As a result, the SBA, and by extension taxpayers, had to pay $11 million.
Business Loans News
Nov, 19, 2013
Nov, 1, 2013
The Securities and Exchange Commission (SEC) has proposed regulation that would allow for investors to buy stock in companies over the internet using crowdfunding exchanges. If the SEC’s rules are implemented, this would allow for investors to buy stock in firms that are not large enough for initial public offerings, thus allowing people to get in on “the ground floor” of a budding startup. This proposal from the SEC comes in the wake of the JOBS Act, which was passed last year.
Oct, 29, 2013
It’s been a year since Hurricane Sandy struck the eastern shores of the United States but many small businesses are still struggling to rise above the destruction. The main source of help is disaster business loans, but few have reached their final destination. As a part of its disaster business loan program, the Small Business Administration (SBA) approved a total of $2.2 billion. But an entire year later, only one-quarter of the loans have made their way into borrowers’ hands, according to a statement last week from SBA spokeswoman Carol Chastang.
Oct, 2, 2013
Businesses are offered more options for funding than ever before, but a new loan program from PayPal could impact the business funding economy more than small alternative lenders ever could. The program, called PayPal Working Capital, requires a single fixed loan fee but does not charge interest payments. Furthermore, borrowers repay their business loans only when they have sales. Repayments are based on a percentage share of PayPal sales and occur automatically.
Jul, 18, 2013
Business lending could become more expensive or restrictive in the future due to the Federal Reserve Bank of New York’s recent announcement about bond purchases. Last month, the New York Fed announced that by the end of 2013 and the beginning of 2014 they would likely reduce and then eliminate their monthly bond purchases. Although the reduction will not begin for several months, and relies on the economy acting according to forecasts, the announcement caused mortgage interest rates to increase at a staggering rate.
Jun, 26, 2013
Not all business experts believe that borrowing a commercial loan is a necessary step in building a successful business. In fact, billionaire Mark Cuban said in a recent interview that only “morons” borrow commercial loans. In order to verify if this was true, loans.org spoke with experienced entrepreneurs who have succeeded with and without borrowing business loans. Yes, Only Morons Borrow Commercial Loans Tanya Brown, Creative Director of Lauren St. Julian, told loans.org that she agreed with Mark Cuban.
Jun, 18, 2013
Few businesses can expand without sufficient capital, which makes business lenders’ willingness to lend more important in this strengthening economy. In honor of Small Business Week, which runs from June 17 to June 21, loans.org interviewed several experts on the impact of business loans on new or existing organizations.
May, 23, 2013
The City of Oakland may team up with Kiva to offer micro-loans to small businesses. The City Council is considering a partnership with the San Francisco-based lending company that would allow three Oakland businesses to receive zero-percent interest business loans for $10,000. Under the deal, Oakland would become a “trustee” in Kiva’s new Zip program. During its first four years in operation, Kiva focused solely on allowing philanthropic individuals to fund projects around the world with small, $25 business loans. In 2009, Kiva brought its interest-free microlending model to the United States.
May, 22, 2013
The SBA has announced a new initiative aimed at aiding veterans build successful businesses. The new Veteran Pledge Initiative will combine efforts by national, regional, and community lenders to collectively increase their lending activity to veterans by 5 percent each year in the coming five years.
May, 20, 2013
The Pennsylvania Supreme Court denied an appeal on a case dealing with predatory lending on business loans. Girard Finance Company, based out of Bala Cynwyd, PA, was denied a formal appeal last week on the $700,000 case. The Pennsylvania Human Relations Commission (PHRC) found Girard Finance Company, and its owner Thomas Richter, guilty of targeting minorities and charging them with excessive business loan rates. The court’s appeal denial is final.