SBA Loan Volume Down in Fiscal 2012

The U.S. Small Business Administration’s popular programs that guarantee loans to small businesses were down in Arizona from fiscal years 2011 to 2012.
The gross dollar amount loaned through the SBA’s 7(a) and 504 programs was down from $540 million in fiscal 2011 to $478 million for the year ended Sept. 30, 2012.
Still, the 2012 figure is higher than the 2010 total of $368 million.
The number of loans closed, however, did not follow the same path. That figure increased from about 1,200 in 2010 to more than 1,300 in 2011, then dropped to about 1,000 this past year.
The silver lining during this three-year period is that the average loan size increased steadily each year, from $289,000 in 2010 to $450,000 in 2012.
The SBA’s 7(a) and 504 programs both guarantee loans to small businesses. The former are typically made by commercial banks, while the latter are made by nonprofit economic development corporations.
The figures in fiscal 2011 may have been inflated because of the expiration of incentives in the Small Business Jobs Act, according to lender specialist Craig Jordan of the SBA’s Arizona district office.
The act temporarily gave lenders a 90 percent guarantee of the loan amount and waived all fees to borrowers. The normal guarantee is 75 percent.
“If I’m getting my loan for free … that is a pretty big advantage,” said Wells Fargo regional sales manager Jim Valley, a 20-year veteran of small-business lending. “In fiscal 2012 and the numbers that just came out, none of those things existed.”
Jordan said SBA lending in Arizona totaled about $140 million for the three months ended Sept. 30 — far greater than the $100 million or so the state typically does per quarter.
One factor that may be pushing quarterly numbers higher is the desire by business owners to get out of lease arrangements by purchasing a building. That is a financing need Valley has seen increase in the past 12 months at Wells Fargo. The economics are there to make the switch, he said.
Top SBA 7(a) and 504 lenders for fiscal 2012:

By loan amount:

Wells Fargo Bank: $75,201,100
Business Development Finance Corp.: $34,931,000
JPMorgan Chase Bank: $31,104,200
Metro Phoenix Bank: $30,2889,900
US Bank: $29,264,900
By number of loans:

JPMorgan Chase Bank: 210 loans
Wells Fargo Bank: 183 loans
BBVA Compass Bank: 107 loans
Business Development Finance Corp.: 66 loans
US Bank: 45 loans
Source: U.S. Small Business Administration


The 10 Scariest Things to a Small Business

Halloween may be a spooky time of year, but running a small business can produce many scary moments all throughout the year. Here are the top ten scariest times for any business owner:

1. Your first day. Your first day of being in your own business full-time is filled with excitement and fear. You may ask yourself, “What have I really done? Did I make a mistake?” What helps: Visualize this moment in your mind before it becomes a reality. Ask yourself how you feel about it and discover the range of emotions that come up. When those questions enter your mind on your first day, you will have worked out some of the answers.

2. The Cash Crunch. Your bookkeeper says you are out of cash and can’t meet payroll or other financial obligations. What helps: Learn how to read your monthly financial statements especially the cash flow statement so there are no surprises.

3. The Desertion. When your best employee hands in her two-week notice, your first reaction will always be one of disbelief and then, “How will it hurt my business?” What helps: Ensure you have non-compete agreements with all employees and frequently review their career path inside the company in order to limit surprises.

4. The Betrayal. You discover your bookkeeper is stealing from the company. What the #!@#$&? What helps: After you call the police, set up a system of checks and balances to make this harder to ever happen again. For example, have one person create vendors and another write checks to them. Have a third person balance the checkbook. By separating responsibilities, you make it more difficult for a person to embezzle from the business.

5. The Credit Crunch. Without warning, the bank cuts off your line of credit, or reduces it to the amount that is outstanding on your loan. What helps: Understand cash flow so you do not pay back your loan too soon. Only rely on the cash in the bank, not the credit available on your line to run your business.

6. The Lawsuit. It is always shocking when you receive a piece of mail informing you that a former employee or vendor is taking you to court. What helps: Have good contracts for employees and vendors that are pre-approved by legal counsel. Avoid long legal battles and settle reasonable claims when possible. They can become a huge distraction.

7. The Audit. It’s almost never good news when the IRS contacts you and you can expect that it will cost your business money. What helps: Use professional CPAs to review your statements and taxes. Get them involved immediately when the IRS or other governmental agencies come calling.

8. The Breakup. When your No. 1 customer leaves you, there’s nothing to do but to pick yourself up off the floor. What helps: Never be dependent on one large customer for a majority of your business. Know which customers make up 80 percent of your business and grow to spread the company risk accordingly.

9. The Price War. When your biggest competitor decides to cut its price to half of what you charge, you’ll first wonder how they can make money at that price. You will next wonder if anyone will continue to buy from you. What helps: Never be in a position where your company competes on price. Customers buy value. Build it within your products’ sales proposition.

10. The Data Disaster. When you lose all of your businesses electronics records to a virus, a system failure or a hardware problem, firing your IT manager might make you feel a little better, but it won’t solve the problem. What helps: Run a drill for this scenario to ensure your company can recoup from the outage. Don’t just assume there is a backup. Instead, test restarting your system from the backup files to make sure everything will run smoothly.

Arizona Posting Small Business Employment Growth!

Phoenix Business Journal by Lynn Ducey, Reporter

Date: Monday, April 2, 2012, 10:34am MST

 Reporter – Phoenix Business Journal

Small business employment in Arizona increased by 1.2 percent in March, the largest amount in the nation, according to the Intuit Small Business Employment Index.

The monthly national report includes information from 77,800 small business Intuit Online Payroll customers taken between Feb. 24 and March 23.

Nationally, small businesses employment increased by 0.3 percent in March — the highest single-month growth rate in more than two years. Growth was 0.6 percent in the Mountain region, which includes Arizona. Arizona, California and Florida had the highest employment increases.

“This is the strongest small business employment report we have had in a long time,” said Susan Woodward, an economist who worked on the study. “Yet at the same time, the hiring rate has remained flat at just above five percent since May 2009. This indicates that small firm employees are staying with their current employers, rather than leaving for bigger firms.”

Hourly small business employees worked an average of 111.9 hours in March, an increase of 0.5 percent from the revised figure of 111.3 hours in February. That averages out to a 25.8-hour workweek.

Average monthly pay for all small business employees increased to $2,785 in March, up 0.7 percent from the $2,767 per month seen in February. The equivalent annual wages would be about $33,400 per year based on the new March data, the study showed.

Lynn Ducey covers tourism, hospitality, restaurants and nonprofits.

City of Phoenix Shops Local!

March 6, 2012

Greg Stanton for News Releases    Mayor Greg Stanton

Mayor Greg Stanton fulfilled two more parts of his 100-day plan today when the city council approved two measures aimed at moving Phoenix’s economy forward.

Stanton and the council passed a program to enhance local and small businesses’ participation for city procurements and approved a streamlined way for businesses to submit plans electronically to the city.

“These are two important city plans I wanted to implement from day one to do our part in helping Phoenix businesses succeed and boost our economy and jobs,” Stanton said. “Local sourcing is key for our homegrown businesses and new technology speeds up the process so we can build upon Phoenix’s rising economy.”

Stanton thanked city manager David Cavazos and the city council for pursuing the electronic plan review and the procurement program in 2011 and seeing it to its approval today, as well as Local First Arizona executive director Kimber Lanning for relentlessly fighting for local and small businesses.

“I am thrilled to see Mayor Stanton taking a leadership role on such an important issue,” said Kimber Lanning, executive director of Local First Arizona, a statewide non-profit acting on behalf of 2,000 local businesses.  “Awarding more contracts to Arizona companies is a sure-fire way to create jobs. The business community appreciates these efforts.”

Stanton promised to fight for local businesses as Mayor and worked with the city and business leaders to push the procurement enhancement, which will allow them to compete for city business for goods and services contracts under $50,000. Stanton also supported a streamlined system of the electronic submittal of building plans.

“This is a win-win for architects and the city when it comes to building plans,” said Patrick Panetta, president of the American Institute of Architects, Arizona chapter. “This is another tool architects can utilize to offer clients greater value. Not only does it save money in the long term, but also it eliminates the tedious process of printing and delivering paper sets and creates a more flexible delivery method.”

Stanton said the two items put Phoenix out front to regain steam and move into a successful future.

“Phoenix is rising out of a recession and gaining speed with jobs, the economy and innovation,” Stanton said. “At the city, we have to keep pace and move ahead with our businesses for a strong economic future.”

Free Help Hiring Employees In Phoenix

Did you know the City of Phoenix Offers Phoenix Companies Employee Hiring Services?
The city of Phoenix is the only city in the region to have an in-house team fully dedicated to meeting your talent needs. Our professional hiring services staff will work with your company to develop and implement a customized talent map and plan. We can provide recruitment practices with the complete offerings of the entire workforce package to give you time- and cost-effective solutions that drive results. We can deliver a full recruitment lifecycle or just part of the process, depending on your needs. Our solutions include:  Candidate sourcing, screening and assessment  Recruitment administration  Market expansions, labor market research  On-boarding assistance  Interview space  Targeted Recruitment events  Custom Recruitment strategy  Free Job postings  Free Job postings via social media  Employer Branding at Professional Job seeker groups All of these services are offered at no charge to Phoenix businesses and have saved companies in upwards of $200,000 in direct hire fees. Community and Economic Development City of Phoenix 200 W. Washington St., 20th Floor Phoenix, AZ 85003 Phone: 602) 262-5040                                                Email

My first video posting (ugh!!!)

What is the Maricopa SBDC? – Signature Event Tonight!

AnnouncementDoor Prizes (RSVP for free to be eligible):

WhenWednesday, February 15th, 2012 6:00pm – 9:00pm

Please RSVP using the “Event Toolbar” on the right side of this page. This will automatically enter you into the “door prize” raffle. You can also browse the list and see who else is attending by clicking on the link titled “See Who’s Attending.”If you are interested in participating as a Table Exhibitor please contact