Re-Thinking and Expanding Strategies on Start-Up and Small Business Lending

It is not new News that the world, with the United States economy and the US dollar at the center, that we are experiencing a significant shift and financial reckoning at this period in history. Now, more than ever, it is critical that we get back to basics when it comes to churning the financial engines of our economy (in this case, the US economy first in its relation to the world economy).

The dirt and and dust that have lay under the rug for so many years is out, and there is no vacuum that has yet been created in order to suck it up, and to get rid of it in an orderly fashion. The dirt has to be analyzed so that it can be properly disposed of,“hopefully” once and for all.

I am a voracious reader as you will learn, if you continue to follow this BLOG. That being the case, I will continue to share articles, books, videos, podcasts and other information that I think may be useful to the readers; and vice versa. We hope to also direct the reader to ACTIONABLE resources and networks as a way to assist you in reaching your start-up and small business financing goals.

Here is some interesting data:

-NASDAQ has lost over 40% of its value since the glory years of the late 1990’s. In all, about 1.5 trillion in investments have been wiped out. A lot of money was lost following the advice of stock market analysts, these experts usually work for big brokerage houses. (see John K. Romano, article High-Risk-Patient Equity Capital for Small Business, International Open Finance Association)


- See New York Times Article "Bill Shields Most Banks From Review" by By STEPHEN LABATON Published: October 15, 2009. I found these points very interesting *House Approved tougher regulations over derivatives. * Community banks and Credit Unions only control about 20% of the roughly $14 Trillion in assets held by commercial banks. According to the articles there are approximately 8200 banks. The 150 largest banks would face more regulatory scrutiny; hold the remaining four fifths of the assets.

-What is the Miller-Moore Amendment? Let's continue to learn more about this amendment. The Miller-Moore Amendment, a new agency that has been created by congress has the authority to write rules for all banks and other lenders.

Other notables from Op-Ed pieces include:

-New York Post September 20, 2009 Hillary Kramer, President A&G Capital Research, New York writes "Rally is For Suckers: Markets Six-month Run" unsustainable without profits, jobs


-Wall Street Journal, October 8, 2009 David Malpass, President of Encina Global, LLC writes "The Weak Dollar Threat to Prosperity". Here are a few points Malpass made that I made an important note of: *Investors have been playing the weak dollar trade for years, diverting more and more dollars in to commodities, foreign currencies and foreign stock markets. *Corporations borrow billions in dollars in order to expand foreign businesses. * Most of the market capitalization of US stocks held by Americans, the dollar devaluation has caused a massive decline in the share of global wealth.


-Many believe that we are becoming a "Casino Economy" meaning we have seen a shift of investment capital from productive investment in the "job creating real economy" to speculative investment in "paper assets". (see John K. Romano, article High-Risk-Patient Equity Capital for Small Business, International Open Finance Association)

- Over the last 15 years, Fortune 500 companies(companies most likely financed by Wall Street) have reduced their workforce from 16 million to five million. Over the same period, small business have added 20 million new jobs. Small business has done this with less than 1% of publicly traded equity capital; it is obvious that if this creative force had the capital, they could propel the economy forward in a spectacular fashion. (see John K. Romano, article High-Risk-Patient Equity Capital for Small Business, International Open Finance Association)

Romano is right to note the extraordinary feat that small business have in the creation of those 20 million jobs or so, whether it be temporary, contract, part time and or full time work. What is important to add and to note as well is that many of these gains in job creation are short-lived if these business go out of business before the five year success threshold and or if these businesses are without sustainable capital in order to keep the business flowing as the owners and their teams build out revenue models and obtain and sustain the staff and talent to help grow their business.

We also need to challenge the SBA lending models that unfortunately often fail in its objective to meet the needs of small business. Ongoing analysis and statistics regarding small business lending through the United States Small Business Administration should be used to improve loan distribution and business support.

These varying points shed light on how the overall economy is affected when small business is not properly leveraged as a foundation to building and growing the economy.