As Melanie Lindner writes in Forbes, the SBA loan market is being freed up by the Obama administration's injection of $15 billion for purchases in the secondary market. This market works like the mortgage market and has been frozen for several months now. By freeing this secondary market banks will have new capacity to originate new loans.
Even better for borrowers, through the end of 2009 the SBA is waving origination fees (not sure about the bankers, I'm sure they'll still want their fees), and upping the percentage the government guarantees from 75% to 90%, making these loans much more attractive to lenders.
So it's now time to go to your banker and ask, what amount and terms can I get now to sustain and grow my business?
Wednesday, March 18, 2009
Sunday, March 1, 2009
Healthcare in America, will it get Fixed?
From President Obama's latest speech, "We can no longer afford to put health care reform on hold." Good news for who? Bad news for who? Hard to be sure at this point, but we can't hope to go on with the double digit rise of the cost of health care.
As noted by Robert Frank in an artcle from February 2007 (when we weren't so wrapped up in the Economy and it's problems that we could rationally discuss health care issues), he noted that "...we spend more than twice as much on health care, on average, as the 21 countries in which life expectancy exceeds ours. American costs are so high in part because the reliance on private insurance multiplies administrative expenses, currently about 31 percent of total outlays." A certain target for the reformers will be this dubious spending on administrative costs in the system, not on customer care directly.
I am aware of a doctor group, and it's not an unusual situation for the industry, that has over 3 times as many administrative staff as doctors, mostly dealing with receivables. These receivables are a big headache, getting payed by the hundreds of insurance companies with different paperwork, dictates, and procedures, not to mention the complexities of Medicare, is a nightmare.
If the administrative costs are to be addressed, the big losers will be health care insurers, Aetna, the Blues, etc as described in today's article by Reed Abelson in the NY Times. The winners will be consumers, doctors, the companies who insure their workers, and the public in general from lower healthcare prices. This is something to anticipate and be prepared for, the later more so if you are on the insurers side.
As noted by Robert Frank in an artcle from February 2007 (when we weren't so wrapped up in the Economy and it's problems that we could rationally discuss health care issues), he noted that "...we spend more than twice as much on health care, on average, as the 21 countries in which life expectancy exceeds ours. American costs are so high in part because the reliance on private insurance multiplies administrative expenses, currently about 31 percent of total outlays." A certain target for the reformers will be this dubious spending on administrative costs in the system, not on customer care directly.
I am aware of a doctor group, and it's not an unusual situation for the industry, that has over 3 times as many administrative staff as doctors, mostly dealing with receivables. These receivables are a big headache, getting payed by the hundreds of insurance companies with different paperwork, dictates, and procedures, not to mention the complexities of Medicare, is a nightmare.
If the administrative costs are to be addressed, the big losers will be health care insurers, Aetna, the Blues, etc as described in today's article by Reed Abelson in the NY Times. The winners will be consumers, doctors, the companies who insure their workers, and the public in general from lower healthcare prices. This is something to anticipate and be prepared for, the later more so if you are on the insurers side.
Wednesday, February 18, 2009
Stimulate Demand and Supply will Follow
Everyone wants their piece of the pie, the pie being the $787 billion stimulus plan. But the cries from small business for more of the pie have gone on deaf ears, according to their mouthpieces at the NFIB and SBEC.
Of course direct assistance is preferable, but haven't we finally gotten past the days of trickle-down Reganomics? Remember the Lafer curve? Is a payroll tax holiday really an effective stimulus? I think not, it will surely keep the lights on a bit longer for struggling small businesses. But isn't the free market supposed to weed out the week suppliers?
With consumers representing 2/3's of economic demand in the economy, should not the biggest stimulus go that group. And in the bill it does, the biggest single item ($116 billion) is for a tax cut for individuals. People are not spending as much as they were, and won't until they feel better about the economy and their prospects. The direct stimulus to consumers will temporarily prop-up their spending until the job engine restarts. This is what the small business community needs, even if they can't see it right now. Fix the demand side and supply will follow, Economics 101.
Of course direct assistance is preferable, but haven't we finally gotten past the days of trickle-down Reganomics? Remember the Lafer curve? Is a payroll tax holiday really an effective stimulus? I think not, it will surely keep the lights on a bit longer for struggling small businesses. But isn't the free market supposed to weed out the week suppliers?
With consumers representing 2/3's of economic demand in the economy, should not the biggest stimulus go that group. And in the bill it does, the biggest single item ($116 billion) is for a tax cut for individuals. People are not spending as much as they were, and won't until they feel better about the economy and their prospects. The direct stimulus to consumers will temporarily prop-up their spending until the job engine restarts. This is what the small business community needs, even if they can't see it right now. Fix the demand side and supply will follow, Economics 101.
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