The only small business bail out plan available…and it’s a good one.

We are it, our plan. The only small business bail out plan available.

The good news is, it is an excellent plan and will truly give you the second chance you need.

Here it is again, spelled out for you.

Significant debt forgiveness while protecting your business and personal assets from liquidation from foreclosure auction and total disaster.

Our bail out program provides you with the following potential results:

Successfully and appropriately transferring your assets into a safe harbor, stripping off all the debt, allowing the business to operate without debt, and then working out your personal guaranty for pennies on the dollar, depending of course upon your personal financial circumstances and condition.

We have been doing this for over thirty years, successfully. However now it is far more important and  absolutely necessary as small businesses are burning down all over the country from massively reduced revenue and bone crushing debt, and there are no viable alternatives, no government programs and certainly no cash giveaways for small business owners in trouble.

In consideration of the personal guaranties so many have signed for SBA loans, other bank debt and even IRS debt, beyond your business, your homes are at risk…that’s the stone cold reality. You may be willing to lose your business but few are willing to give up their home and this is a very real possibility because of your personal guaranty.

If not from foreclosure then without your business and with limited alternative employment opportunities, many will simply not be able to afford the debt service and thus will now lose their home because of an inability to support its debt service.

There are no options that work as well, or work at all.

Call me,  let me describe to you alternative strategies. 413-584-2581. Norm will arrange a tele-conference for us to talk.

Trust but verify…. always, but definately when buying a business.

I hear it all the time. People who have purchased businesses, invested a huge amount of their own money and then borrowed more to close the deal, only to then find out that the seller either ‘cooked the books’ or simply lied about revenue, sales, etc. and the buyer believed it. The buyer typically finds out way to late, after the deal closed and is sitting in the drivers seat, wondering were the revenue  went.

It never was there, is the usual answer, you were duped.

Rule one: Trust everyone but verify the facts. Hard verification, real verification, test the customer base, check the bank statements , see what was actually deposited monthly, one can’t lie about that one, its easy to check. Call the top ten clients and make certain all is well with them and the relationship, verify their purchases and willingness to continue. Any opposition from the seller regarding this communication is a clear sign tha all is not right. Insist or pass.

Do whatever you can to absolutely determine exactly what sales revenue is. This is the most common area of error a buyer makes, believing the bloated sales projections of the seller without personally  verifying the facts.

The second issues is when he seller cooks the books, making them appear to be better then they are. Its easy to do, but once again verifying monthly bank statements and talking to the top ten clients will prevent such scams from succeeding. Do it, do not be foolish its your cash and there is no possible reason to rely on the sellers information without verifying.

The cash business. ‘I do not deposit the cash,’ they say, ‘it’s here but I keep it so as to not pay taxes on it, everyone does it, but I CAN PROVE IT…..’ and on the story goes..

Here is the bottom line. First if they lie to the government they will clearly lie to you. So if the tax returns are not reliable and the bank statements likewise are also not reliable then either run the other way, or explain that you can only evaluate the business based on actual deposits and tax return statements, and actually filed and signed forms. If the owner is shorting them both then he either has to understand he is hurting the valuation of the business by doing this and cannot expect you to pay for phantom invisible income or you will simply not purchase.

Only evaluate the business on verifiable information, tax returns and bank statements are the primary indicators of real revenue. If he cheated the government then he pays the price when he sells as the value is what is reported not what he steals.

Furthermore there are secondary ways of determining real revenues. Look at the production records and the inventory movement, employee productivity, sales commissions, etc, all are direct indicators of what was made and shipped and what was paid for…all a direct determining factor of revenue.

If you do your diligence you will not be fooled.

There is absolutely no reason for anyone to get beaten by someone who has cooked their books or lied about revenue, it is far too easy to check it out and determine what the real truth may be. Failure to do this is iresponsible and you have no one to complain to, as you caused your own demise.

This issue occurs way to often and it is way to easy to prevent. Do not fall into this trap.

SBA to the rescue!! More money available for existing SBA borrowers having trouble paying their SBA guaranteed loans. Just what we need!

Of all of the administration’s small business initiatives, the one that they hope will most directly help struggling small business owners is a new “business stabilization loans” program that will ‘back bank loans of up to $35,000′ for business owners who are having trouble keeping up with payments on previous loans.  The fresh cash infusion is intended to free up money that business owners can then use to pay their bills and their employees.

The Recovery Act gave the SBA just 15 days to come up with guidelines for the entirely new program – a deadline that the SBA missed last week. The SBA will have more information available for banks and business owners as soon as possible, agency officials said.

We shall see what the brain trust does, it appears to be a nice idea for businesses that can still afford the debt service going forward but for some reason -wonder what- fell into arrears.

The real solution is a debt workout reducing the principal dramatically.  This is the only  solution.

If your business cannot make the current payments additional borrowing will only serve to deepen the hole you’re in -not improve the situation.  How does increasing their debt load by further borrowing help small business owners  survive the reduced revenues that is creating their problems? Simply put, it doesn’t.

So what’s he point of lending businesses -who are already having trouble paying their SBA debt service- more money that they must then pay back?

Makes little sense to me unless the SBA honestly believes the economy will turn around in the next month or two, thus restoring the borrowers cash flow, their gross revenues and profitability sufficiently so that not only the original loan, but now also the new loan can be repaid.

What are they smoking?

What is really happening in the economy, what to expect and why.

The material for this entry is gleaned from a blog I read daily and highly recommend which is called:

	“Mish’s Global Economic Trend Analysis” <MikeShedlock@gmail.com>
:

……it tells us what is happening…really and what to expect. Read it and plan accordingly, we are in for a long haul.

• The trouble with the economy is that the banks aren’t lending. The reality: The economy is in trouble because American consumers and businesses took on way too much debt and are now collapsing under the weight of it.
• The banks aren’t lending because their balance sheets are loaded with “bad assets” that the market has temporarily mispriced. The reality: The banks aren’t lending (much) because they have decided to stop making loans to people and companies who can’t pay them back.
• Bad assets are “bad” because the market doesn’t understand how much they are really worth. The reality: The bad assets are bad because they are worth less than the banks say they are.
• Once we get the “bad assets” off bank balance sheets, the banks will start lending again. The reality: The banks will remain cautious about lending, because the housing market and economy are still deteriorating. So they’ll sit there and say they are lending while waiting for the economy to bottom.
• Once the banks start lending, the economy will recover. The reality: American consumers still have debt coming out of their ears, and they’ll be working it off for years.

The above link above has a video of James Galbraith trashing the plan and more details on the five misconceptions.

Lost your business? It may be time to turn your hobby into your next business!

Unemployment is through the ceiling, this we all know, especially if you are either one of the 4 million who has lost heir job, one of the 12 million who has been forced into a part time position, or one of the millions of  entrepreneurs,  small business owners who has been put out of business and has few options, consider turning your hobby into a business. There are many benefits.

Maybe the message is , it is time for a change. The economy has forced you out of your job or your business and now you have an opportunity whether or not you were ready or asked for it, to re-invent yourself, change your life even more then it already is. Why not consider making your passion, your hobby, your new business? Why not opting for a new quality of life?

First of all, with the advent of the internet, a web site, a blog and perhaps a video or two, you can market to the entire world for an extremely low cost. You can work out of your home, not only keeping the overhead down, but enjoying many advantageous tax deductions. Its a low cost start up as you probably have been doing this for years and are already established.

I can tell you hundreds of stories of women who have turned quilting into a business over the internet, world wide, men who have turned fly making into a huge success, others who raise and ship valuable orchids, expensive tropical fish which they raise, art, graphics, crafts of any sort, writing, poetry, you name it if you do it there is a market for it.

The home office space usage is now a deductible expense, (see home office deductions blog entry).

Most importantly you are an expert in something you do and can develop this into a positive cash flow which in the end may become your long term business strategy or in the short run may help you maintain your existence as you prepare and determine your next venture, job, or business undertaking.

Treat it like a business, write the business plan, do the cash flow projections and then launch.Why not, you must do something to survive this downturn and marketing your hobby may be a reasonable direction to take.

Internet marketing is turning millions. People buy product, service and information. Information may be one of the largest growth opportunities available as so many are wanting expert instruction about so many varied topics, and since the internet is wide world, and based on the long tail theory ( see other blogs entry’s on this subject) The short paper on how to do it, with extremely low cost and extremely high profit can turn  into cash overnight.

While selling the widget is profitable, selling how to make the widget may be even more profitable.

Do it, I can only assure you many whom have tried have turned their hobbies into a lucrative home business. Many have changed their life styles and are enjoying it far more then their high risk, high stress work.

If not overly successful, but at the very least creating a little cash,  at least you have greater tax benefits and have enjoyed your time doing it while you look for the next job, or business opportunity.

Turn change into an opportunity, get in front of the train, but do not let it run you over. Try, what other options do you have at the moment? What have you got to lose?