What is the Definition of “Small Business”?

Asian Woman Laundromat Owner_Smaller_iStock_000009299574Large

What is the definition of “small business”?  According to the SBA Office of Advocacy, “small business” is defined as an independent business having fewer than 500 employees.  So, whether you own a home-based cleaning business with 2 employees, or a pharmaceutical lab employing 450 people, you are part of the 28.2 million small businesses operating in the U.S. as of 2011.  Compare that number to 17,700, the number of businesses employing 500 people or more.

It’s no wonder why small businesses are the lifeblood of the U.S. economy!

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4 Myths About SBA Loans

Myth_iStock_000016454287LargeIn this day and age, the term “loan” seems to scare everyone, including small business owners. But don’t be afraid!  The Small Business Administration (SBA) and banks around the country are eager to lend to small businesses and are offering more and more programs to help small business owners start, manage and grow their businesses!

Here are the top 4 myths about getting a SBA loan:

  1. Getting a SBA loan will take forever and will require a ton of paperwork.
    FALSE: If you find the right qualified lender, getting an SBA loan shouldn’t take longer than a conventional loan. There are also express programs like the Celtic Express SBA Loan. These loans are fully amortized with no access fee per transaction. The automated process provides fast turn-around times. These express programs were designed to reduce paperwork and make the process much easier for you.
  2. I can get an SBA loan directly from the SBA so why use a bank?
    FALSE: The SBA does not lend money. A lot of people think the SBA provides grants to small business owners, but that is not true. The SBA is a government guarantee program that issues guarantees to decrease the risk to the bank when lending to small businesses.
  3. You need perfect credit to get a SBA loan.
    FALSE: Low credit scores do not necessarily translate to no loan.  In fact, since the recession, lenders are approving more loans with less than perfect credit scores than ever before.
  4. SBA loans have high interest rates and fees.
    FALSE: The SBA actually works hard to keep fees and interest rates low for SBA loans. Typically, the SBA only charges guarantee fees between two and four percent of the guaranteed portion of the loan, depending on the amount of the loan. Interest rates are also monitored by the SBA.  A borrower can get either a fixed or floating rate and the SBA limits how much interest a lender can charge on a loan as well.
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Encore Entrepreneurs?

Senior Couple Holding Open Sign In StoreIf you think the boom in the financial and tech markets mean that to be a successful entrepreneur you have to be young, naïve and on your first venture, then you thought wrong. Increasingly more and more people over the age of 50 are looking into running their own business as their form of income to get them through their “retirement years.” Innovation is not a quality that stems from the young, innovation can come from any source. In fact in the past ten years more seniors have become entrepreneurs than 20-somethings. In fact, the average age of technology company founders in the U.S. is 39, and when you look at the statistics there are about half as many entrepreneurs under the age of 25 as there are over the age of 50. What’s more is these encore entrepreneurs are successful business owners as well: more than half of new businesses launched by entrepreneurs over the age of 50 are still in business after five years, something that young entrepreneurs can’t boast about that could be due to the wealth of wisdom and knowledge encore entrepreneurs have gained from their life experiences. To help address some of the challenges faced by senior entrepreneurs, the Small Business Administration (SBA) and AARP entered into a strategic alliance to provide Americans over the age of 50 with the tools and information they need to launch new companies in March 2012. As a result of this effort, SBA, AARP, and its partners have helped nearly 120,000 new and existing small business owners over the age of 50 between April 2012 and May 2013.

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Building A Company Culture of Charity

Owning and operating your own business allows you to take care of yourself, your family, your employees and your consumers. Your company culture encompasses more than just your service, products and attitude. Your company culture is comprised of your shared values and practices. It is so important to define your company culture early on because it defines you and your employees. Your culture will evolve and change as your company grows, so be aware of it and try to form your culture around you’re your target market and your core values and beliefs. Increasingly charitable companies are becoming more and more popular to consumers because the culture of giving has become such a staple of the American way. Getting you company involved in any type of charity is a great way to give back and to show your employee’s how important it is to contribute to your community. This also makes your consumers aware of the emphasis you place on your community as a whole. To instill a company culture of charity in your business follows a few of these tips

1.    Make a Plan
Commit yourself to the idea of charity by making it a part of your business plan. Allocating a certain amount of your earnings each year to a specific charity is a great start to increase your philanthropic involvement.

2.  Make Sure Everyone Is Involved
A business is a lot like a machine, and if one part isn’t working the whole thing is at risk of failure. The best way to instill a strong sense of group identity and company culture in your business is to make sure everyone is putting in some effort. When people work hard at something they generally start to really care about it, so making your employees not only work hard at their job, but work hard at giving back can really shape the whole feel and attitude of your business.

3. Care
Choose a charity or organization that means something to you, your business or employee’s. At the end of March Celtic Bank spent the day volunteering for the Junior Achievement of Utah, teaching kids how loans and banks work. It was an amazing opportunity for our employees to get involved with the community and reach out to try to teach money management so that in the future financial crisis’ can be avoided. We also had a lot of fun while doing it!

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Surge in Successful Women-Owned Businesses

African American Business Woman

Ever since the financial crisis, there has been a surge in successful women-owned small businesses. Women are emerging as leaders because of their innovation, significant ideas, and strong work ethics.  In fact, women-owned businesses are growing at a higher rate than any other group over the past 15 years. There are currently 8.3 million businesses owned and operated by women in the United States.  Women should be proud of how far they have come!

There are aspects of the workforce that women can work to improve to help their businesses have a greater impact on the United States. For instance, even though women own a little over one quarter of all businesses in the United States, they employ less than 10% of the nation’s workforce. Women-owned businesses also contribute only 4% of total business revenue in the United States. However, there is hope for women entrepreneurs in the future.  Great effort and achievement has been made, and women will continue to succeed in the workforce.  Now more than ever, there are options, including business grants, to help women fund their businesses!

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