Limomangary

Tougher economic times are the points in history in which savvy investors and the worlds greatest capitalists FIND their greatest gains on investments. They seek opportunities where their returns can be 100% to infinity; how do they find such opportunity when everyone else CHOOSES not to? They seek out undervalued markets and undervalued businesses (those that include newly created businesses that are short on capital but with well-developed plans; niche’ opportunities within established markets). An area that is of special concern and interest is funding of small businesses, that is those with designs on creating a large national or international product and creation of systems & numerous jobs in-turn those that can generate and sustain positive revenues. This time of economic difficulty and mistrust fostered by mismanaged corporations & funds, along with our new president, have both signaled the need to shift from focus on BIG Business as operated today to emphasizing the development of small businesses as the future for a return to our country’s greatness. In addition current BIG businesses can create only limited job opportunities due to potential redundancy, thus they generally look to ramp up revenues through shift in business philosophy and streamlining. Note that publicly traded companies, after laying-off workforce (downsizing) typically go through a period of great capital gains and increasing stock values. This almost seems to not make sense from an investor standpoint, because the company is now loosing some of its ability to manufacture its products or supply services, but closer looks reveal that a company, post-downsizing, actually gains in cash-flow value due to the salaries & long-term benefits now off and coming off the books from the number of displaced staffers. This increase in positive cash flow becomes an enticement to investors as the publicly traded company now has more capital with which to dedicate to R&D of new products, pay down debts and move more nimbly toward better profitability; most importantly now can yield dividends to its investors. In addition the investor sees the company as transforming to streamlined operations as typically more work and speedier product creation is called for and gotten on the part of the remaining work-force. In essence they have now created a more financially viable entity, one in which the investor sees the possibility of great gains. Today NY State Governor Andrew Cuomo issued his second “State of the State” address with  emphasis on economic growth of the state’s economy in 2012; he touted tourism as a key factor and Gov. Cuomo said “New York will keep the momentum going with a $200 million second competitive round of regional economic development awards in 2012…”

For more go to The Poughkeepsie Journal web-site link: http://www.poughkeepsiejournal.com/article/20120104/NEWS01/120104014/Cuomo-Investment-economic-development-tourism-key-2012?odyssey=tab|topnews|text|PoughkeepsieJournal.com

http://money.cnn.com/2009/05/21/smallbusiness/banks_wary_of_arc_loans.smb/index.htm

NEW YORK (CNNMoney.com) — The Small Business Administration plans to begin dispersing funds in mid-June for a new, highly anticipated emergency lending program, but don’t race off to the bank to fill out an application just yet. Many lenders are still sitting on the sidelines, waiting for more details from the SBA before they decide whether or not to participate.

“What is the economic incentive for banks to make these loans?” asked Arne Monson, president of Holtmeyer & Monson, a consulting firm that works with small business lenders.

That’s a question many potential participants are asking right now as they await formal guidelines from the SBA for the “America’s Recovery Capital” program. Created as part of the stimulus bill, the initiative aims to bring temporary relief to established small business suffering through the recession.

Borrowers can apply for interest-free loans of up to $35,000 to help cover their payments for six months on existing debt, with no repayment due on the ARC loan for 12 months. The loans will come from banks and other authorized lenders, but the SBA will offer those lenders a 100% guarantee on the loans – meaning that if the business owner defaults, the government foots the bill.

That’s great in theory, but potential lenders are wary of how it will play out. Banks have spent years wrangling with the SBA over the bureaucracy of collecting on the agency’s loan guarantees. ARC loans are intended to go to businesses that are “viable” but also suffering “financial hardship,” and until the SBA offers more specifics, bank officials say they are leery about making the correct call on which applicants they should green-light for loans.

“If there is a faulty closing or process at the bank level and SBA voids the guarantee – which has higher likelihood in this program – the bank will face a total loss at that point,” Monson noted.

Another concern for bankers: ARC loans are intended to be interest-free for borrowers, who will only have to repay the principal. That caused much grumbling in an online comment forum hosted by Coleman Publishing, a trade publisher for SBA lenders.

“‘Interest free to the borrower?’ Why would we do that?,” wrote one commenter.

“There needs to be greater clarification on what will motivate the banks to make these loans. We have scarce resources,” another banker wrote.

SBA officials say they expect lenders’ doubts to disappear as the agency finishes working out, and releases, more details on how the ARC loans will work. For example, while the SBA doesn’t yet know what interest rate it will pay banks for ARC loans, that amount won’t be zero. The agency will subsidize every loan, making some sort of interest payment to the banks on the borrower’s behalf.

Some banks will join the ARC program simply for the civic value of helping small business customers, but others say they won’t participate unless it’s in their financial interests to do so. One official at a major SBA lender, who declined to speak publicly, said that the loans’ small size and bureaucratic overhead mean they probably won’t be a “profitable, effective solution” for his bank.

Potential borrowers are also clamoring for specifics. The SBA hasn’t said yet said precisely which businesses and what kinds of debt will qualify for ARC loan relief, though it has begun filling in the outlines of its plan. This week the agency said it considers a “viable” small business to be one that has been profitable in at least one of the past three years. ARC loans can be used to pay down a line of credit, a credit card, or a bank loan, but the stimulus bill’s rules forbid the loans from being used to make payments on SBA-backed loans made before February of this year.

More details will be communicated to banks by June 8, according to SBA officials. The agency expects ARC loans to be available to borrowers by June 15.

That date can’t come soon enough for some potential applicants. “There’s no question this loan is a big issue for us,” said Jay Cullimore, president of Tropical Lights Inc., an online lighting retailer. “It’s been effort to stay alive and grow.”

After six years in business, Cullimore took out $20,000 line of credit in mid-2008 for his Fort Lauderdale, Fla.-based business. Now, nearly a year later, his sales are down 50%, he’s had to lay off four employees, and the interest rate on his credit line has zoomed from 7% to 25%.

Cullimore approached his bank, which participates in the SBA’s loan-guarantee programs, for more details on ARC loans, but the bank was unable to give him any guidance on when or how he might be able to apply.

“I can’t believe any bank would be unhappy that I’d be able to pay down the line, but it feels like the SBA is an insider job,” Cullimore said. “If you don’t know people who are connected, you won’t get it.”

Borrowers can apply for an ARC loan from any lender that certified for participation in the SBA’s programs. If his own bank doesn’t get on board, Cullimore plans to seek a loan from another.

In the stimulus bill, Congress allocated $255 million to support the ARC loan program. That money covers only the program’s subsidies, for interest payments and defaults, allowing the money to stretch to support a larger dollar-volume of lending. The SBA is still calculating how much the program will be able to lend, but it forecasts that the ARC loans will be available to 10,000 small businesses.

“We believe the lenders are ready to go,” said Eric Zarnikow, the SBA’s associate administrator for capital access. “We believe many have been looking at portfolios and customers and good candidates for ARC loans already. We have the expectation they’ve already thought about it.”

Some have. At Webster Bankin Waterbury, Conn., Bob Polito is anxious to start making loans. He trusts the SBA to draw up reasonable policies, and he’s willing to settle for whatever interest rate the agency sets for the loans.

“We want to make sure [the ARC loans] are beneficial to us, but there’s also the goodwill aspect of just helping our borrowers,” said Polito, Webster Bank’s director of government-guaranteed lending. Come June 15, when the SBA begins backing ARC loans, he plans to pounce.

“I’ll be at my computer signed into the server at midnight to make sure we get those funds to borrowers who will benefit,” he said. “The only concern I have is that the funds will go too quickly.” 

Read the rest of this entry »

http://money.cnn.com/2009/05/18/smallbusiness/emergency_small_business_loans.smb/index.htm#According to an article on the CNNMoney web-site today (5.18.09) To kick off National Small Business Week, the government announced its timetable for a hotly awaited assistance program. WASHINGTON (CNNMoney.com) — An emergency loan program designed to shore up struggling-but-viable small businesses will open for applications in mid-June, the Small Business Administration announced Monday. The news came during a speech by SBA head Karen Mills kicking off the SBA’s annual National Small Business Week program of publicity and networking activities. Known as America’s Recovery Capital (ARC), the emergency loans were authorized in February’s stimulus bill. The SBA has been working since then to pull together guidance for the new program, which will back short-term loans of up to $35,000 that business owners can use to temporarily cover their payments on existing debt. No repayment on the ARC loans will be due for 12 months, and owners will have up to five years to repay them. The SBA plans to release guidance to banks by June 8 and will be ready to accept lender loan packages by June 15. Business owners will need to apply directly to banks for the loans, but the SBA will offer those banks a 100% guarantee on the ARC loans they make. If the business owner defaults, the SBA will pay off the loan. SBA Administrator Mills called the ARC loans “risky” and very different than the loans her agency typically backs. Aimed at businesses with “immediate financial hardship” but a past track record of financial success, the loans are intended to aid companies that “are in a situation where they just need a little extra help to bridge the troubled waters,” she said. Right now, many small businesses find themselves struggling against the economic tides. Mills acknowledged that her constituents are in trouble and looking to the government for help. “I have started to think of the SBA not just as a backbone for small business, but as an entire bone structure,” she said before a crowded audience at the Mandarin Oriental hotel in Washington. Talk back: Could you use an ARC loan? Sworn in last month as the SBA’s leader, Mills’ talk on Monday marked one of her first public speeches in her new role. In her remarks, she said that the top three priorities for her agency are more progress on fulfilling the small business provisions of the American Recovery Act, revitalizing the agency, and “making the SBA the strongest possible voice for small businesses in the U.S.” The Recovery Act, better known as the stimulus bill, allocated $730 million for initiatives aimed at shoring up the country’s small business. So far, “the results are good,” Mills said. Since one stimulus provision took effect in mid-March, offering banks higher guarantees and waived fees on SBA-backed loans, the average weekly loan volume is up more than 25%, she said. But that increase comes against a dismal backdrop for small business lending. In the quarter ended March 31, the number of loans made through agency’s popular 7(a) loan program dropped 57% compared to the prior year, and several major lenders have sharply reduced their activity. Senator Mary Landrieu, D-La., the chair of the Senate’s small business committee, joined Mills in a small press conference after the public speech. Landrieu told reporters that it’s a top priority for the committee and the agency to determine why 50% of the nation’s banks aren’t partnering with the SBA. The SBA itself does not directly loan money, but works with partner banks to offer government-backed loans. “I would love to see any small business owner just walk around the corner to their local bank and say they’re looking to expand their business,” she said. “That bank should ask the SBA – would you be a partner with me?” Landrieu also said that finding a better health care solution for small businesses is a top priority for her. As for the agency, which employs 2,000 full-time workers, Mills said she plans to invest in “training, planning and better communication across the SBA … and for repeated calls to break down silos, to give up sacred turf.” Internal reform was also a priority for Mills’ predecessor, Steven Preston, who served as SBA chief from July 2006 to April 2008. After a 2005 government survey found that the SBA had the lowest employee morale of any major government agency, Preston devoted much of his energy to streamlining the agency and improving morale. Read the rest of this entry »

It seems that everyone is chasing the tech industry windfall possibilities, such as search, social networking, and any other “next generation” development, in an effort to start or help fund the next: Microsoft, Google, facebook, etc. All wonderful ideas but bare in mind that the industry to one that is flooded with ideas, start-ups and money flooded into R&D which severely reduces the possibility of cornering the market and having the next ‘Big Idea’ happen.

As I see it and has been talked about for generations, the savvy investor looks for viable market penetration vs. entering a saturated market; that being the case many investment dollars and deal flow are not reaching under-served start-up & early-stage companies that operate in the service industry (keep in mind that of the world’s richest individuals, the industry most represented is service & or manufacturing of goods).

I would like to suggest that whether you are a major or minor investor, looking to buy low in this economy with potential to sell extremely high, you seek out companies that are service based that have strong development plans but are currently under-capitalized. Considering the current climate and call for entrepreneurship by our country’s new administration, the small company that is currently struggling and needs funding can be well positioned after weathering the storm. Those that are left standing will have endless possibilities for revenue generation when money begins to again hit the market and consumers begin to again loosen the purse straps.

Consider this fact that my early-stage company’s operation is within the 6.5 billion dollar Car & Limousine Service Industry, a 1% market capture rate translates into 65 million dollars in annual revenue.

I welcome any thoughts or comments, leave a comment on the blog or contact me:

garyt@expressionlimo.com / 845.453.2488

Blog Maverick Mr. Cuban, I greatly consider you an example of capitalism at is best (meant positively not critically). As an owner of a small fledgling company (Expression Limousine, Inc) based in NY, one that I am attempting to build into a large national brand that caters to private, corporate, and entertainment industry clientele, I look at what you have been able to accomplish with your companies as a great motivator! My post to you today though is regarding your continuance of actions, with your basketball franchise, that cause your fine totals to mount to an astronomical number (certainly not a number that you can not pocket). As someone that has searched diligently and frustratingly for funding to get wind into the sails of my company, when I see the amounts you have paid in fines and consider the better use it could be placed it does add to my own frustration. Considering that I can not gain traction nor audience with people of your ilk that have the means to make significant investments in small businesses with potential of gains to infinity, it does heighten my frustrations to see your actions and the almost callous way in which you carry them out. I would hope that you see the frivolous nature of continuing to battle with the NBA, racking fines almost in a spiteful manner and possibly consider putting that kind of money to better use by investing it into small disadvantaged (under capitalized) businesses. Thanks greatly for your ear (eyes) for these few moments. Sincerely, Gary Thomas (Limomangary)

To all I hope that  you will find content and information as well as follow-up discussions informative and engaging, and even sometimes entertaining. Most of all I hope that you find Optimism for what ever it is that you need or are looking for or quite possibly weren’t looking for but found it here…

Thanks for visiting and being a part of the Blog Limomangary experience!

The Challenge: don’t just be optimistic but take your optimism to the next level. Optimism about what? your plans, your life, your future, your finances…Go get it!