The Small Business Administration (SBA)

How The Small Business Administration Helps Entrepreneurs

In the United States, one of the most popular and widely used organizations for entrepreneurs is the Small Business Administration. This administration exists for the sole purpose of helping people start their own small business by offering resources and financial assistance to entrepreneurs.

The Small Business Administration (SBA) has the mission to maintain and strengthen the nation’s economy by enabling the establishment and viability of small businesses and by assisting in the economic recovery of communities after disasters. While the SBA does not make loans directly to small businesses, they do help to educate and prepare an entrepreneur to apply for a loan through a financial institution. In addition, they will also serve as the guarantor for the loan with the bank. The administration will also help get government contracts for small businesses following natural disasters.

Since its creation, the SBA has directly or indirectly helped over 20 million businesses get off the ground, and in 2008 alone they had a loan portfolio of 219,000 loans, worth more than $84 billion, making them the largest single financial backer of business in the entire country.

The SBA was created in 1953 through the passing of the Small Business Act by congress. It was created to aid, counsel, assist and protect small business concerns. It was also stipulated that the SBA would provide fair proportion of government contracts and sales of surplus property to small businesses. Sadly, while the Small Business Administration has proven to be essential for millions of businesses, it has been nearly dismantled several times in its existence. In 1996, the Republican-controlled House of Representatives planned to end the agency but it survived and had a record budget in 2000. Four years later, the Bush Administration tried to end the loan program of the BA but was not able to, so the budget was cut and certain expenditures were frozen.

The SBA has several programs in place, with the most visible programs being the loan programs. Many believe that SBA loan programs are for those with bad credit who cannot get bank loans and need the SBA to effectively co-sign, but this is not the case. The primary uses of the loan programs are to make loans easier to pay, with less interest. Typically, the most common use of the SBA loan is for commercial mortgages on buildings that small businesses would like to build, or to move into.

The loan programs that the SBA helps to finance include:

1. Loan Guarantee Program: The 7(a) Loan Guarantee Program is designed to help a small business owner start and expand their business. It does this by making money available to the small business through the bank, or non-bank lending institutions. This is the most popular loan program administered through the Small Business Administration.
2. 504-Fixed Asset Financing Program: This program provides funding for the purchase and construction of real estate, or the purchase of machinery for a business. With this program, the lender will provide half the financing, while a Certified Development Company will provide 40 per cent of the financing through a SBA-guaranteed debenture. The last 10 per cent of the financing is provided by the applicant and due to the high amount of capital that is needed, this type of loan is much harder to get and aggressive vetting of any property purchased is done.
3. MicroLoan Program: This is a loan program that is provided through non-profit, microloan intermediaries to small businesses who have less than perfect credit. These loans are only up to $35,000 and can have a term length of no longer than eight years in total.
4. Economic Development Program: This program offers free counseling and low-cost financial training to small businesses.
5. 8(a) Businesses Development Program: This program offers assistance to the development of a small business that is owned/operated by someone who is classified as socially and economically disadvantaged. This typically means women and minorities.
6. Disaster Loan Program: Homeowners can receive long-term and low-interest loans to rebuild or repair a damaged property to pre-disaster conditions. The SBA will determine the cost of repairing or rebuilding the property structure, the ability of the applicant to repay the loan and whether or not the applicant can get credit elsewhere.

The SBA loan industry can be split up into three categories, which are:

1. The largest banks in the United States, which is typically the Bank of America and Wells Fargo, generate most of the SBA loans. These banks use computer systems that make the process much quicker to allow people to get loans through the SBA that they would not have been able to receive elsewhere.
2. SBA loans are used quite often by banks of all sizes to finance the purchase or construction of business owner-occupied real estate. Banks will offer loans through the SBA only for this purpose and only for properties and business owners that the bank would have found too risky to give money to on credit without the backing of the Small Business Administration. These often include gas stations, car washes and motels.
3. SBA loans are used to allow a person to buy a business. Commercial lenders will get a referral fee to business brokers who help someone buy or sell a business and for this reason, the funds for this typically come from smaller banks and finance companies that operate for this purpose specifically.

The Small Business Administration exists to help people start or continue to operate their business. In tough economic climates, the SBA can be one of the most beneficial and highly sought after organizations in the country for entrepreneurs. Anyone in the United States who is thinking about starting a business should seriously look to the Small Business Administration for assistance.

First Published: EntrepreneurJourney.com Oct 16, 2010

IHG Rewards 2018 Award Changes

Intercontinental Bora Bora Goes Up

IHG, or Intercontinental Hotel Group, has around 5000 properties around the globe and almost 10% of IHG properties will face a price increase this year. In Canada, 34 hotels will go through price adjustments.

Almost 500 hotels will increase in price by points and 192 are going down. These changes are effective as of Jan 16, 2018. Top tier hotels like the InterContinental Bora Bora, Hong Kong, and many others, will go up 60,000 to 70,000 points a night. Worse yet, these top tier hotels were just 50,000 points a night 2 years ago. So these are massive devaluations in the course of 2 years.

Although 192 hotels will go down in price by 5000 points, not a single property is going down to IHG’s lowest category of 10,000 points a night. In Canada, 34 hotels are changing value in points. 21 properties are going up and 13 are going down. To see the full list, go to the IHG Rewards Night page https://www.ihg.com/rewardsclub/content/us/en/reward-nights

This is one of the IHG’s worst devaluations ever and they haven’t notified their members in advance. I have some IHG points and I was hoping to visit upscale Intercontinental locations in Bora Bora and Asia in the future. But with this devaluation looks like it may not make sense and I better use my points for IHG PointBreaks.

PointBreaks is IHG’s highly sought-after feature that allows its members to stay in nearly 100 hotels around the world every quarter and each quarter brings fresh lists of new hotels. I will do a separate article and video on this in the future.

Rewards Canada Publishes Top Travel Rewards Credit Cards

What You Need to Know About Affiliated Credit Card Rankings

Rewards Canada just published its top travel credit cards listings and like every year, American Express cards shine in most of the categories. I will only give you the top 5 credit cards as per Rewards Canada and will discuss in brief what’s wrong with these ratings.

- Amex Cobalt Card

- Amex Gold Rewards Card

- WestJet RBC World Elite MasterCard

- RBC Visa Infinite Avion

The problem with these top-rated cards is that none of them provide (except RBC Avion) full insurance coverage and concierge service. These are the most important features you should look for when shopping for a travel rewards credit card.

Another thing these sites that provide top rankings never disclose is that all these cards are affiliated cards and they are promoting these cards, meaning they make money off you by recommending these cards and it’s in their best interest to only recommend cards that will make them the most money.

American Express even issued a press release making this (being in Rewards Canada’s top cards) a big deal. You can visit this press release Here.

This is called cross promotion. Rewards Canada is promoting American Express and American Express is promoting Rewards Canada. There is nothing wrong with promoting affiliated credit cards as the best credit cards. What is wrong is not disclosing properly to the readers that these are not honest and unbiased ratings.

Consider this scenario: based on these recommendations, a reader purchased a trip costing $3,000 and that trip had to be canceled. But then the reader found out that the top credit card he or she picked did not provide Trip Cancellation insurance and now he or she is at loss for $3,000. Will Rewards Canada pay for this loss? I don’t think so.

Watch the video link provided here to find out how to detect these affiliated links and how to protect yourself. I will also show some USA sites where these types of links and recommendations always come with disclosure. But in Canada they never disclose anything to the public to pump up their credit card sign ups. The more good things you will hear about these cards (and hiding the bad things), the more you will sign up and the more money they make.

What's Wrong with Rewards Canada Top Travel Rewards Credit Cards

There are no best credit cards, as each card comes with different perks and features. Choose the one that best matches your needs. Subscribe to my YouTube channel www.youtube.com/adawn to get regular unbiased and honest updates and reviews on credit cards and rewards points. And yes, my channel and this website (AhmedDawn.com) are not affiliated or paid by any credit cards companies.

The Joy of Not Working

The Joy of Not Working

First Published: Aug 19, 2008 ADawnJournal.com

Imagine that an undergraduate engineering student is doing the following:

• Taking a year off

• Quitting school not once, but twice

• Skipping 85% of his classes

• Failing first-year English three times

If he is in a class of 250 students, what would you expect him to rank? The last possible rank (the 250th) or maybe the 150th?

This is not an imaginary story. This student is now the world famous author Ernie Zelinski. He did graduate, ranking 7th among those 250 students. Zelinski’s international bestseller The Joy of Not Working has sold over 250,000 copies and has been translated into 17 languages in 21 countries.

I just finished reading this book, and was greatly inspired by it. While reading The Joy of Not Working, I had the feeling it was I, not Ernie who wrote it. I could not have agreed more with everything he said, each paragraph, every sentence, and every word. It was such a feeling … it was just like reading my own thoughts expressed eloquently by someone else. Perhaps this is because I am going through a phase in my life in which I desire to live on my own terms, and that is what Zelinski talks about in this book.

I am happy to announce that Ernie Zelinski has agreed to an interview request.  The interview will be conducted sometime next week, and I would like to offer my readers the opportunity to ask him some questions.  Please email me your submissions over the next few days.  I will pick a few of the best ones and include them in the interview. Also, I will be doing a review of The Joy of Not Working shortly.To submit your questions, you can email me through contact page, or you can leave a comment right underneath my postings.

Twenty- five summers ago, Ernie Zelinski asked for two months off work. His boss declined, but Ernie decided to take two months off anyway. He was fired upon his return. That was his last job and he has not worked since then.

Free E-Book - Download the preface, Chapter 1, and Appendix from The Joy of Not Working.

Buy the full version here

You Need Only One Strange Idea To Become A Successful Entrepreneur

Being An Entrepreneur With A Strange Idea

When we think of successful entrepreneurs, we think of Richard Branson and Bill Gates, two people who made huge companies out of nothing, making things people need. However, being an entrepreneur also means taking an idea no one has, and turning it into something people will want, even though they do not need what you are selling. Case in point, the pet rock, possibly one of the greatest entrepreneur stories of all time.

Gary Dahl was just an advertising executive from Los Gatos, California, when he hit upon a strange idea. He was sitting in a bar in 1975, listening to friends complain about their pets. From this, he hit upon the idea of creating the perfect pet, which led to the idea of selling rocks to people, complete with instructions. The manual stated that a rock did not need to be fed, walked, bathed, groomed, would not die, become sick or disobey you. He drafted the manual that night at home for the pet rock, filling it with gags and puns and making it seem as though the pet rock was an actual pet.

Dahl then went to a building supply store and bought a bunch of rocks, which he put in cardboard boxes with straw in them and breathing holes. In 1975, Dahl created Rock Bottom Productions, which sold rocks for $3.95. The manual was 32 pages long and was called The Care And Training Of Your Pet Rock, and had everything for caring for your pet rock including feeding and bathing it. It also showed how to teach the rock to sit and stay and even how to roll over, come and stand with help from the owner.  The expenses for this venture were minimal, with the biggest expense being the die cutting and manufacture of the boxes. The boxes themselves cost one penny, while the straw was free. Dahl also had a printing job for a client and had the manuals printed as part of it, meaning he had nearly no expenses for the pet rock.

The pet rock fad lasted for six months in total, but during that short run, which hit the Christmas season, millions of pet rocks were sold. From getting the idea for a pet rock in April 1975, to December 1975 when the fad ended, Dahl became a millionaire based on an idea most would have thought of as completely insane and doomed to failure.

The point of this story is to show that strange ideas can make a lot of money if you know how to market it properly. Selling rocks to people may seem stupid, but it made one man millions of dollars and it has served as an example of how being an entrepreneur can mean following your dreams and ideas and seeing them pay off for yourself. Sure, it only lasted six months but Dahl has more money than he needs now because he took a risk, which is what being an entrepreneur is all about.
First Published: EntrepreneurJourney.com Oct 3, 2010