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What You Need When Applying for a Small Business Loan

Small business loans are most often used for short-term financial expenses, such as building your inventory or covering accrued taxes. You can even use it to cover payroll. Sometimes, you can even get the loan to cover a disaster. If you’ve decided to go for a small business loan, here are some things to keep in mind before you do.

1. Check your credit history.

The credit history is one of the big things that lenders will look at. You’re going to need a credit report for them (and, it’s not bad to know your credit score for yourself). Get a copy of your credit report from three major reporting agencies. Check to see if those reports have any mistakes. You need to be informed.

2. Your company.

You’re invested in your business. You’re passionate. Now, prove it. Go into the meeting with business and personal financial statements, accounts receivable and accounts payable, working capital, a loan request, your business plan, any reference letters, tax returns and anything else that will help the lender make a decision. It helps to show that you have a plan, you know what you’re doing, and you’re in it for the long haul. Being unprepared and disorganized never works in your favor.

3. Assets

In this market, you may need collateral. Does this mean your house? It might. If you can’t afford to put up your house as collateral for your business (you should probably keep business separate), then you need to take stock of any other assets your company may have. If your company doesn’t have the assets, you may have to use your own. Keep that in mind.

Before you get out there, do some research to make sure a small business loan is what you need. Interest rates may be higher for a small business loan. The money doesn’t necessarily come all at once. There are some fees involved. While a small business loan can be a great way to quickly cover some costs, there are other ways to raise the equity.

Have you ever applied for a small business loan? What do you wish you know before you started the process?

Investors buy gold by the ton

It reads like the beginning of a supervillian plot to take over the world.

The world’s wealthiest people have responded to economic worries by buying bars of gold, sometimes by the ton, and moving assets out of the financial system, bankers catering to the very rich said on Monday.

Because the moon laser can only be powered by solid gold!

Seriously though, fears of a double-dip downturn had boosted the appetite for physical bullion as well as mining company shares and exchange-traded funds, UBS executive Josef Stadler told the Reuters Global Private Banking Summit.

“They don’t only buy ETFs or futures, they buy physical gold,” said Stadler, who runs the Swiss bank’s services for clients with assets of at least $50 million to invest.

UBS is recommending top-tier clients hold 7-10 percent of their assets in precious metals like gold, which is on course for its tenth consecutive yearly gain and traded at around $1,317 an ounce on Monday, near the record level reached last week.

In a sign of the uncertain times, some clients go further.

“We had a clear example of a couple buying over a ton of gold … and carrying it to another place,” Stadler said. At today’s prices, that shipment would be worth about $42 million.

Julius Baer’s chief investment officer for Asia is also recommending that wealthy investors park some of their assets in gold as a defensive stance following a string of lackluster U.S. data and amid concerns about currency weakness.

“I see gold as an insurance,” Van Anantha-Nageswaran said. “I recommend 10 percent as minimum in portfolios and anything more than that to be used for trading purposes, to respond to short-term over-bought or over-sold signals.”

Banks still failing

The largest number of bank failures in nearly 20 years has eliminated jobs, accelerated a drought in lending and left the industry’s survivors with more power to squeeze customers.

279 banks have collapsed since Sept. 25, 2008, when Washington Mutual Inc. became the biggest bank failure on record. That dwarfed the 1984 demise of Continental Illinois, which had only one-seventh of WaMu’s assets. The failures of the past two years shattered the pace of the prior six-year period, when only three dozen banks died.

Two more banks went down last Friday, and failures are expected to “persist for some time,” according to a report issued Tuesday by Standard & Poor’s. In the second quarter of this year, the Federal Deposit Insurance Corp. increased its number of problem banks by 6% to 829.

Between failures and consolidation, the number of U.S. banks could fall to 5,000 over the next decade from the current 7,932, according to the top executive of investment-banking firm Keefe, Bruyette & Woods Inc.

The upside of failures is that they can represent a healthy cleansing of a sector that grew too fast, with bank assets more than doubling to $13.8 trillion in the decade that ended in 2008. Many banks that failed were opportunistic latecomers. Of the failed banks since February 2007, 75 were formed after 1999, according to SNL Financial.

Still, economists say, the contraction represents an enduring threat to capital, lending and the economy.

Bad economy, strong marriage?

Does a bad economy lead to stronger marriages? According to data released on Friday from the Center for Disease Control and Prevention, the divorce rate is at its lowest point since the early 1970s. And, infidelity has continued to decline.

The divorce rate per 1,000 married women sank to 16.4 in 2009 from 16.9 the year before and a far cry from 22.6 in 1980, according to an analysis of the data from the National Marriage Project at the University of Virginia.

The divorce rate has long been a sticky statistic, with some figures functioning as projections, or using experiences from one generation to draw conclusions about the unions of others. Most statisticians agree that overall divorce rate has been on the decline since the so-called “divorce revolution” of the 1970s.

As the economic downturn wears on, the divorce rate decreased more from 2008 to 2009 than from 2007 to 2008.

The downward trend in the divorce rate from 17.3 in 2005 to last year’s 16.4 speaks to the historical trend of the number of divorces in a downturn decreasing, even in an era when many couples waiting longer to get married and have kids. Legal fees, a dreary real-estate market and other economic malaise might be causing some couples to hold off from divorcing. Others may be banding together in tough times.

Infidelity overall hasn’t increased over the last 20 years, according to his research.

Among adults who were ever married in the 2000s, 21% of men and 14% of women reported that they had ever had sex with someone other than their spouse while they were married, according to the Project’s analysis of General Social Survey data. In the 1990s, 22% of ever-married men and 14% of ever-married women said they’d had an affair.

Dipping into the 401(k)

Withdrawals from 401(k) retirement saving plans saw their biggest spike in at least five years, Fidelity Investments said on Friday, in the latest sign of hardship amid a dismal economy.

Fidelity reported that 62,000 people made hardship withdrawals from their 401(k) workplace plans during the second quarter. That’s up from 45,000 participants during the prior quarter, a 37% increase. That means that 2.2% of Fidelity participants took a hardship withdrawal in the second quarter, compared to 2% in the same period last year.

That means that 2.2% of Fidelity customers took a hardship withdrawal in the second quarter, compared to 2% in the same period last year.

Fidelity also said that 11% of participants took out loans from their 401(k) over the past 12 months, an increase of two percentage points from the prior year. The average loan amount was $8,650 at the end of the second quarter.

Fidelity said the top reasons people took loans and made withdrawals were to prevent foreclosure or eviction, pay for college, or purchase a home.

“The current economy has forced some workers to borrow from their 401(k) accounts in order to pay for critical living expenses, ultimately jeopardizing their future retirement,” said James MacDonald, president of workplace investing for Fidelity Investments.

Oil prices at $76

(Reuters) – Oil hovered near $76 a barrel on Thursday after a three-day price slide as robust euro zone growth data were largely eclipsed by lacklustre macroeconomic data that reinforced doubts on the global fuel demand outlook.

Early in the session, prices rallied after news that euro zone gross domestic product (GDP) grew at its fastest pace in more than three years in the second quarter, boosted by strong performances in Germany and France.

But mixed macroeconomic data out of top oil consumer the United States later doused positive sentiment.

By 10:52 a.m. EDT, U.S. crude prices for September were down 15 cents at $75.59 a barrel after rising more than $1.

ICE Brent crude was down 26 cents at $75.26.

“The whole week has been about poor economic data and today’s releases show that the U.S. consumer is still on the mend,” said Harry Tchilinguirian, commodity strategist at BNP Paribas.

“Retail sales disappointed and if consumer confidence in August managed to come in a notch above expectations…it still remains below the June reading.”

U.S. retail sales rebounded in July but showed hints of lingering economic softness while consumer sentiment appeared to have stabilized in August following a sharp drop the previous month.

But earlier strong European data on Friday has helped set a floor beneath prices at least temporarily, analysts said.

The Organization of the Petroleum Exporting Countries said demand for oil would continue to grow slowly in 2011, when world economic expansion is projected to be slightly lower than this year’s, leaving the current supply overhang intact.


Front-month crude was on course for a nearly 6 percent fall for the week, and analysts expected it to stay below the $80 a barrel benchmark.

Oil prices were in a $70-$80 a barrel range, where they have mostly traded since June, barring a brief foray above $80 in August.

“The market is very much in ’08 mode when it was doubting aspects of the recovery. There is an element of suspicion about whether it’s sustainable,” said Barclays Capital oil analyst Amrita Sen.

In the previous session, the number of people filing new jobless claims in the United States unexpectedly rose to its highest level in close to six months, a fresh signal of sluggish economic recovery.

Stocks of oil products in the U.S. including gasoline rose last week even at the height of the summer driving season, according to the U.S. Energy Information Administration.

This week’s wrap-up

A wrap-up for the week of August 2nd.

Bad news in the business world today.

Stocks are slumping because the job number for July were released. Number for jobs lost in the month of July is hovering around 131,000.

The value of the US dollar continues to fall in response to these numbers. Wheat prices are soaring because of prolonged drought in Russia.

People are boycotting Tylenol, Mortin, and Benadryl after the FDA slammed a children’s Tylenol facility back in May.

So much for the bad news.

Good news?

Christina Romer, head of President Barack Obama’s Council of Economic Advisers, will step down and return to her teaching post at the University of California, White House officials said on Thursday. The resignation will take effect on September 3. Romer, who has been a big supporter of health care reform and the president’s stimulus plan, is one of Obama’s principle economic advisers — certainly, one of the most visible. The two meet on almost a daily basis.

Federal officials are sounding increasingly optimistic that the end is in sight in the drive to permanently seal the well.

BP finished pouring cement down the well on Thursday in an operation known as a “static kill,” completing the job earlier than expected. The process took six hours.

And, John Goodman lost 100 pounds, so…great!

Mercedes-Benz up 13 percent

Mercedes-Benz sales are up 13.2% for the month of June. Demand was driven by China and the US markets. Mercedes-Benz sold 113,300 cars worldwide last month, which is its best June performance in history.

The premium brand’s sales in China were up 177 percent last month to 13,700 cars, U.S. sales were up 20.5 percent to 18,300, and sales in Japan gained 26.5 percent compared with June last year to reach 3,400.

It seems, despite the state of the world economy, the luxury car is still in demand.  Sales for Mercedes-Benz have been positive all year. It’s something to keep an eye on.

Economy grows, joblessness persists

The economy grew at a 3.2% rate for the first three months this year, a testament to an economic recovery. At the end of 2009, the pace was a bit higher at 5.6%, so, while there is deceleration, there is still growth. It seems that the growth is not fast enough.

Accommodating population growth and rising productivity, the economy should be expanding at a rate between 2.5% to 3%, this out of the Commerce Department. Because the rate is only a little over this long-term projection, it will take longer for the unemployment rate, 9.7%, to come down.

It seems that the expansion was driven by American consumers, thus making the trend sustainable. While the federal government increased its spending, local and state governments cut spending at a 3.8% rate to compensate.

Sales rise, employment to follow

Bloomberg reports that, with sales growing stronger and the future of the economy looking brighter, more and more US companies are planning on increasing their payroll.

Businesses planning on increasing staff in the next six months surpassed projections by 21 points, up from six points in January in a survey conducted by the National Association for Business Economics.

Though recovery will still be slow, demand is higher and still rising. Also, it looks like inflation may be held in check as fewer companies will increase prices.

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