Obama: $15B for Small Businesses(mast-economy.blogspot.com)
mast-economy.blogspot.com
Obama: $15B for Small Businesses
http://mast-economy.blogspot.com/2009/03/obama-15b-for-small-businesses.html
15 comments
The country is bigger than the valley and tech isn't the only industry. Tech startups also don't make up the vast majority of small businesses in America.
True enough, but I'd strongly prefer a more general policy (such as a payroll tax holiday) that would benefit all businesses.
Anyone under 40 should feel quite foolish paying payroll taxes anyway, considering that social security will self-destruct long before we get any benefits.
So in addition to paying payroll taxes, tech startups are helping to subsidize loans for startups in other industries!
Anyone under 40 should feel quite foolish paying payroll taxes anyway, considering that social security will self-destruct long before we get any benefits.
So in addition to paying payroll taxes, tech startups are helping to subsidize loans for startups in other industries!
(not that I think any of us would actually want a handout!)
Speak for yourself! Ill take a handout!!! :D
Obama is also making it easier to invest in small businesses and startups, according to the whitehouse blog:
"... a series of tax cuts for small businesses and tax incentives to encourage investments in small businesses. He noted further that in his budget, he proposes permanently reducing to zero the capital gains tax for investments in small or startup businesses"
Not sure how much investors care about taxes when they are investing in a startup, but it seems like this would make funding more available.
http://www.whitehouse.gov/blog/09/03/16/Help-for-small-busin...
"... a series of tax cuts for small businesses and tax incentives to encourage investments in small businesses. He noted further that in his budget, he proposes permanently reducing to zero the capital gains tax for investments in small or startup businesses"
Not sure how much investors care about taxes when they are investing in a startup, but it seems like this would make funding more available.
http://www.whitehouse.gov/blog/09/03/16/Help-for-small-busin...
Where do I sign up?
Seriously, how do you get a SBA loan?
Seriously, how do you get a SBA loan?
http://www.sba.gov/services/financialassistance/loanapplicat...
Let me warn you in advance: they're set up to fund laundromats, McDonalds, and dental practices, NOT websites or software developers. The process of applying for the loan will consume an intense amount of resources which could be better spent getting stuff in front of customers.
For most people on HN I'd advise you to invest sweat equity, get ramen profitable, and just grow via reinvestment of revenues at that point.
Let me warn you in advance: they're set up to fund laundromats, McDonalds, and dental practices, NOT websites or software developers. The process of applying for the loan will consume an intense amount of resources which could be better spent getting stuff in front of customers.
For most people on HN I'd advise you to invest sweat equity, get ramen profitable, and just grow via reinvestment of revenues at that point.
Actually, we had an SBA loan for a web software company in the web 1.0 days. We were doing web-based products and some custom dev for the higher-education sector.
From what I recall, they were less worried about what you did and more concerned about crossing your Ts and dotting your Is. They wanted detailed biz plan (not your 37signals 1 pager), 3-5 years of projected P/L statements, balance sheets, etc.
We got the loan (roughly $100k) through a local bank and, while there were mountains of paperwork, they were great to work with. After the .com bust, a lot of Calif. schools (our main market) got their budgets and grants slashed and our business slowed. The bank was really cool about letting us make interest only payments for a while.
Eventually, we were able to sell the business for enough to pay off the loan and have a little extra dough.
From what I recall, they were less worried about what you did and more concerned about crossing your Ts and dotting your Is. They wanted detailed biz plan (not your 37signals 1 pager), 3-5 years of projected P/L statements, balance sheets, etc.
We got the loan (roughly $100k) through a local bank and, while there were mountains of paperwork, they were great to work with. After the .com bust, a lot of Calif. schools (our main market) got their budgets and grants slashed and our business slowed. The bank was really cool about letting us make interest only payments for a while.
Eventually, we were able to sell the business for enough to pay off the loan and have a little extra dough.
Assuming you have a "profitable model" wouldn't you want to leverage as much capital and you can muster?
patio11-
please source your data on why they are NOT set up to fund developers or websites.
That is not my experience... and at some point your business will require capital and an SBA loan is a nice alternative.
please source your data on why they are NOT set up to fund developers or websites.
That is not my experience... and at some point your business will require capital and an SBA loan is a nice alternative.
In my experience it is likely a business with
1) extraordinarily little capital or collateral
2) no or low revenues
3) no physical location
4) little documentation attesting to the nature of the business (leases, franchise agreements, written quotes for proposed capital purchases to be made with the loan proceeds, that sort of thing)
5) a founder who does not have a successful business background
6) a founder who does not individually have a very strong credit history (true of many of the young'uns here, largely as an artifact only recently starting work)
etc, etc will have a bit of difficulty getting through. I respect that your experience may be different. Most of mine comes from shepherding startups through the Japanese analog when I worked at a technology incubator here -- one of our main skills was, ahem, learning how to describe high-tech realities in terms of words responsive to requirements tailored towards industrial businesses.
(You don't have "no" capital, you have source code. How many man months in that? Seven? Great, we'll value that at the $10,000 per month chargeout rate for an intermediate engineer in this neck of the woods: you have $70,000 worth of intellectual capital. So we'll fill in $70,000 in this bubble here. How many suppliers do you have? Zero? Well, OK, you use electricity, right? So Chubu Power is supplier #1. Do you take business calls? NTT, #2... OK, 12 suppliers.)
1) extraordinarily little capital or collateral
2) no or low revenues
3) no physical location
4) little documentation attesting to the nature of the business (leases, franchise agreements, written quotes for proposed capital purchases to be made with the loan proceeds, that sort of thing)
5) a founder who does not have a successful business background
6) a founder who does not individually have a very strong credit history (true of many of the young'uns here, largely as an artifact only recently starting work)
etc, etc will have a bit of difficulty getting through. I respect that your experience may be different. Most of mine comes from shepherding startups through the Japanese analog when I worked at a technology incubator here -- one of our main skills was, ahem, learning how to describe high-tech realities in terms of words responsive to requirements tailored towards industrial businesses.
(You don't have "no" capital, you have source code. How many man months in that? Seven? Great, we'll value that at the $10,000 per month chargeout rate for an intermediate engineer in this neck of the woods: you have $70,000 worth of intellectual capital. So we'll fill in $70,000 in this bubble here. How many suppliers do you have? Zero? Well, OK, you use electricity, right? So Chubu Power is supplier #1. Do you take business calls? NTT, #2... OK, 12 suppliers.)
Because they want you to have tangible assets that can be sold to recover some of the debt. If they give you money for a website and it fails they lose it all.
Here is a list of top banks that offer SBA loans...
http://www.tlmanage.com/sbabanks.html
This is great news!
This is a very narrow policy that will not help most small businesses, particularly not most tech startups, etc. Most of us either bootstrap or take VC funding -- neither of which have any hope of taxpayer bailout!
This makes a great headline for Obama but is not doing anything for the valley.