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Read MoreA bankruptcy judge in Florida recently sent a message to big banks: When your debtors go into bankruptcy, quit trying to get money out of them or you’ll be the one who ends up paying, the Huffington Post reports. The case concerns a debtor who went into bankruptcy, and filed a debtor’s discharge, which is meant to protect a debtor from collection actions. But, sometimes banks ignore the discharge. Which is what Bank of America did in this case, calling the debtor an additional 38 times to ask about the outstanding payments. In the end, BofA had to pay; the bankruptcy judge ordered them to pay $12,500 in attorney’s fees and damages for emotional distress. Sure, that can’t be too big of a problem for BofA, but the precedent has been set.
Read MoreTrailer Bridge, Inc. reports that it has emerged from Chapter 11 proceedings, according to Marine Log. William G. Gotimer, Jr. and Mark A. Tanner, the company’s co-Chief Executive Officers, jointly stated, “Today marks the beginning of a new era for Trailer Bridge. While we are pleased to announce today’s developments, we are most proud of the fact that throughout the bankruptcy period we have successfully and consistently met the needs of our customers and vendors. Trailer Bridge has a young fleet of vessels and a cost-friendly model that provides significant benefits to our customers. With this new capital structure and ownership we believe we can improve our service in a number of ways to the benefit of all concerned.” Trailer Bridge submitted a restructuring plan to the United States Bankruptcy Court for the Middle District of Florida on January 14, 2012 that was approved by a Federal judge on March 16, 2012. As a result of Trailer Bridge securing $31.5 million in exit financing from its majority note holders, the company will pay unsecured creditors and contract parties 95-100% payment on their pre-filing claims. Holders of Trailer Bridge equity will receive a cash payment of $0.15 per share. Those shareholders that hold more than 2,500 shares will have the option to elect to receive their share of 9 percent of the reorganized Company’s common equity. Trailer Bridge expects its new stock to continue trading on the Pink Sheets under the ticker symbol “TRBR.” It will no longer be filing reports with the Securities and Exchange Commission.
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The pace of lending to small businesses appears to be at a standstill. A study released Tuesday by PayNet, a financial research firm, shows that lending was virtually unchanged in March for the second straight month.
The Thomson Reuters/PayNet Small Business Lending Index came in at 98.2 in March, down from 98.3 in February. The index registered 110.5 in December as companies acquired equipment before the expiration of tax deductions at the end of 2011. PayNet’s analysis shows that lending is up 14 percent from a year ago, but it’s also at the level where it was during the summer.
PayNet bases its index on new commercial loans and leases granted to small businesses by the lenders in its database. The company says applications for credit by small businesses are at about the same level as they were at the end of the recession in June 2009 — a sign that many small businesses remain hesitant to borrow even though interest rates are still extremely low. Many companies want to be sure the economy and their sales are growing solidly before they take on debt.
Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2012/04/03/national/a030116D56.DTL#ixzz1r084OomC
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Partisanship in Washington has risen to an all-time high and “politics as usual” has come to mean complete gridlock, where the most basic legislation falls flat because of political gamesmanship. That’s why the bipartisan jobs bill headed to the president’s desk for approval is such a breath of fresh air. The Jumpstart our Business Startups (JOBS) Act will do some real good for America’s entrepreneurs — our nation’s primary job creators who, with help from laws like the JOBS Act, can pull the country out of its financial stupor.
Read Full Article from The Hill
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The latest small business lending index shows that credit unions are way outperforming larger banks when it comes to getting capital to small businesses.
The most recent Biz2Credit Small Business Lending Index, for February 2012, has some interesting news. According to Market Watch, large bank lending to small business remains flat, while the rate of growth at credit unions is twice that of small banks.
Over the last year, the largest institutions in the US who received taxpayer assistance specifically to lend to small business only approve an average of 10% of the requests they receive. Credit unions approve more than 50% of their loan requests from small businesses.
And credit unions aren’t just a new player. According to data from regulators, during the period from December 2007 through December 2011, banks choked back lending by nearly 15%, while credit unions during that same time increased lending by 45%.
Read MoreDoes your bank have a website that brings small business owners together? U.S. Bank is addressing the need of of small businesses to connect with other SBOs by launching a new site with helpful advice and useful ideas called “Connect” at usbankconnect.com. According to Business Wire, Connect provides SBOs with the tools and resources they need to help start, run or grow their business. The site contains articles, blogs, worshops, and videos that address many of the common SBO question. The goal is to provide the advice and guidance entrepreneurs need to either get started or continue to grow.
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The financial crisis exposed the industry's skeletons and lured fraudsters, leading to 2011 having the highest amount of financial crimes ever.
In 2011, suspected instances of money laundering, consumer loan fraud, debit card fraud, mortgage loan fraud, casino fraud and other scams hit all-time highs, ABC News reports. Suspicious activity reports, known as SARs, are submitted to the Treasury Department’s Financial Crime Enforcement Network and typically fluctuate between 1.2 million and 1.3 million since 2007. But in 2011, they jumped up to more than 1.5 million.
“The financial meltdown that took place from 2007 to 2009 uncovered all the skeletons, what was taking place in the marketplace, from mortgage financing to Ponzi schemes,” one analysts said, “Massive fraud isn’t discovered in good times. It’s when the market changes, and financial institutions start looking closer, when the checks stop coming in, they take a closer look at what’s going on.”
Between 2007 and 2011, there was a 74% increase in fraud cases where people working within a financial institution exploited internal controls for their for their own gain, according to a study by KPMG. Other analysts attribute the rise to scammers taking advantage of the meltdown who normally wouldn’t enter the financial market.
Read MoreMore than 300 SMB representatives who say they were duped by informal lenders protested this week outside a provincial banking regulatory agency in Guangzhou, a economic powerhouse, this week, Xinhua News Agency reported. The protesters prompted the deployment of over 100 policemen while they demanded the regulator stop bank from pressing small businesses to “repay high debts insured by defrauding guaranty firms.” This is the third protest in Guangdong after police started fraud investigation into the two informal lenders, Huading Financing and Guarantee Co. and Guangdong Wealth Guarantee Co. last week. The protesters allege that the lending firms helped the SMB’s secure loans from banks, but only released part of them. The businesses are asked by the banks to repay the entire debt, including funds that were not disbursed.
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New SBA program aims to bridge the gap between small businesses and large corporate supply chains.
Market Watch – A new private-public collaboration will help small businesses strengthen their revenue streams by gaining access to more than $300 billion in combined supply chain spending by a consortium of fifteen of America’s largest corporation, the SBA announced this week.
“Supplier Connection”, is part of President Obama’s American Supplier Initiative and is designed to help bridge the gap between small business and large corporations. According to Market Watch, studies have shown that small businesses that are part of large corporations’ supply chains experience increased revenues and employment. The fifteen companies participating are: AMD, AT&T, Bank of America, Caterpillar, Citi Group, Dell, Facebook, IBM, JP Morgan Chase, John Deere, Kellogg’s, Office Depot, Pfizer, UPS and Wells Fargo.
The initiative aims to address four key areas in which small businesses need help in order to become successful suppliers in the private sector: access to mentorship and counseling services, increased market and revenue opportunities, ready sources of capital to fund their growth, and a highly skilled workforce.
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