Recently in the Access to Capital Category

    President-elect Obama officially announced the key members of his economic team today.    He tapped Timothy Geither, for Secretary of the Treasury, and Larry Summers as Directory of the National Economic Council.   Also named were Christina Romer, Chair of the Council of Economic advisors, and Melody Barnes and Heather Higginbottom as Director and Deputy Director of the Domestic Policy Council. 

   Response has been positive to these appointments from many corners and from Republicans and Democrats alike.   Senator Richard Shelby (R-AL) said "...I believe he will be up to the challenge.  He knows a lot about the economy, and he knows a lot about problems...I think he will do well."    Let's hope all Americans, from both parties and all walks of life will work together to alleviate this difficult economic situation.   We are encouraged.

    Little action to date has been taken to provide targeted stimulus to small business.   Talk of a stimulus plan was overshadowed by a $25 billion auto bailout plan that failed to garner support in Congress last week.   A skeptical Congress asked the Big Three to come back with a more comprehensive plan after the Thanksgiving recess.   The Senate and House will likely return the second week in December to consider the auto bailout if a plan can be fashioned that is more acceptable to Congress.

    Also, it is expected that Congress will not pass any additional broad stimulus bill until the new Administration comes into power in January.   Prominent Members of Congress, such as Senate Majority Leader Reid, have suggested small business measures such as temporary guarantee and oversight fee elimination, for lenders in the SBA's 7(a) and 504 loan programs.   This is an issue WIPP has been ferverently pressing as a way to free up much needed capital for small businesses.

    The Obama team is reported eyeing a large 2 year stimulus package which they hope will create 2.5 million new jobs.   Obama's plan may include provisions that he proposed in his small business plan during the camapign.   Those include:   lifting the capital gains tax for start-up businesses; expanding the SBA loan and micro-loan programs; making the Research and Development tax credit permanent; and implementing the Women's Procurement Program that was signed into law eight long years ago.

    Both the House and Senate Small Business Committees took action last week to push the Treasury Department to free up credit to small businesses.   Senators Kerry and Snowe sent a letter to Secretary Paulson urging him to use some of the bailout funds to purchase pooled SBA loans to stimulate the flow of capital to small businesses.   The Committee expressed its worry that none of the bailout money has translated ino small business credit.   The House Small Business Committee held a hearing to urge the Treasury to free up capital for small business lending.   In addition, Chair Velazquez urged more agressive lending through the SBA small business loan program.   Both Committees demanded that the Treasury Department and Federal Reserve work with the SBA and take bold action to jumpstart lending.   The Treasury Department has come under fire from Capitol Hill for using the bailout money to buy up other banks, instead of freeing up lending.

    Check WIPP's and SBTV.com's websites for up to the minute information.

    We are certainly entering into difficult times, and WIPP members and small business owners throughout the country are grappling with business strategies to not only stay afloat - but to grow their companies.

    Given the rolling financial markets and our rather uncertain economy, companies are implementing a non-stop budgetary belt-tightening process in order to secure a stronger foothold in these insecure times.   While some advisors are suggesting cutting back or waiting out this economic crunch, Terri McNally, President of Global Capital, Ltd. and a WIPP National Partner suggests an alternative route.

   Terri tells us that regardless of economic climate, equipment financing is a strategic financial option for businesses to consider.   During a downturn such as this, equipment financing takes prescedence for preserving capital, maintaining cash flow, and allowing flexible financial solutions for riding out the storm.

    The equipment leasing and finance industry manages assets and employs strategies to ensure that the most productivity possible is gained from company equipment.   She has some advice for companies who are forming a financial strategy regarding the equipment that they need now, as well as the equipment that they will need for their future.

• Keep the big picture in mind.   Don't let restrictions in cash flow hold your company back for things that you need now.   A company can gain efficiencies and reduce costs by constantly planning ahead and understanding the things they need in order to become as successful as possible.
• Update technology before it fails - maintaining older, fully depreciated equipment may seem like a thrifty business strategy, but it is a false economy.   Older equipment inevitably brings higher maintenance costs - which may be hidden in  departmental operating budgets.
• Always remember that flexibility is crucial.   Leasing is an inherently flexible business.   It must be, because it lets companies expand or renew their equipment independent of budget cycles, and allows the conservation of precious capital resources.

    Understanding not only where you are now, but where you would like to be in the future is a critical role in playing a successful part in the business world.   Allow yourself the opportunity to explore all of your options.

    Check out the WIPP website, the Access to Capital webpage for more details.

    Something new has come up - it is called "behavioral advertising".   I'm not that familiar with it, but maybe you are.     If my facts are correct, this concerns the use of information that a consumer inputs on the web through website visits and purchases, and how the advertiser uses it to customize advertising to that consumer. 

    This is important to all of us as consumers, and of course as small business owners.    We should be able to control what information about us or our businesses is collected, if we want it collected, and how we want it used.   It seems simple to me that the easiest way to deal with this now is for advertisers to seek advance consent for data collection.   If you purchase music or books on line, for example, and want to receive recommendations of other similar products - great; if you don't want it - then you should be able to specify that you do not want your information collected and retained for future use.  

     There was a hearing recently by the Senate Committee on Commerce, Science and Transportation on this very issue.  I was glad to see that   AT&T, Time Warner and Verizon all testified as witnesses and all agreed that consumers should be made aware of any on-line tracking before it begins and have the option to allow it or not.  

     Let me know your feedback on this.   It is becoming increasingly important for us to pay attention to privacy matters such as this.  

     We've written many times before about how much small businesses depend on the internet  to grow their businesses - it is an ever increasing part of their business operations and they count on it to be affordable and accessible.

    We're more than a little bit concerned about the Google-Yahoo! agreement which would give them a combined 90% of the search advertising market.   We already know and understand the impact and power of Google in setting price and we know the power small busineses have when the market sets the price.  

    WIPP's small businesses are being hit hard now, unable to obtain the credit they need to fund payroll and growth, and when that happens, job creation goes down.    With unemployment projected to be at 8% nationwide by the end of 2009, small business owners much be allowed to grow - and they must be allowed to leverage their dollars.  Of all times, they must have access to the internet to build their businesses and leverage online advertising and internet search advertising.  

    I just can't see how were are going to have better choices or better service with a Google-Yahoo! agreement.   Why would they want to be competitive when they own 90% of the marketplace?    

   The current scenario surrounding all of us means interest rates are rising, and credit availability is readily tightening up.   Nevertheless, companies still need their equipment to continue running efficiently.   Try to think about the next 6 months to one year to determine what equipment you need and what equipment will be best forthe future of your company - and acquire it now!

   We are in a situation where even if there is an opportunity to pay cash, the smarter option is to finance the equipment, keeping the option open to refinance later.   Take advantage of the low interest rates, the additional depreciation benefit, and the credit availability while it is still possible.    

  One strategy  Global Capital, LTD is telling their customers about is to take advantage of temporary tax breaks with recent increases to Section 179.   You can combine all of the benefits of accelerated write-offs for your equipment purchases provided by these temporary tax breaks.  

   For tax purposes, the IRS Code Section 179 provides accelerated write-offs for capital expenses.   Businesses purchasing $800,000 or less in capital equipment during 2008 can deduct up to $250,000 of that expense immediately on their 2008 tax return. 

   If your 2008 budget requires more than $800,000 in capital equipment investment, you'll need to manage the tax ownership of those assets in order to maintain your Section 179 write-off. 

   Let us know what credit crunches you are experiencing - let's see if we can help provide the educational tools and resources you need to get you through this difficult period.