http://blog.inc.com/the-entrepreneurial-agenda/ Veteran reporter Robb Mandelbaum writes about the big issues that affect entrepreneurs, especially as they relate to the 2008 presidential campaign. Read full bio en-us 2009-06-16T17:06:00-05:00 hourly 1 2000-01-01T12:00+00:00 http://blog.inc.com/the-entrepreneurial-agenda/2009/06/senators_tell_ahem_ask_irs_to.html A bipartisan quartet of leading Congressmen and Senators has called on the IRS to stop collecting stiff penalties from small firms investing in illegal tax shelters, when those investments generated only "modest" tax benefits. The lawmakers say they hope to write new legislation that would ease the penalty schedule these small firms would face. The penalties stem from a 2004 law that requires companies and individuals to disclose on their tax return any tax shelters that the IRS has listed as abusive. For individuals, the penalty is $100,000, for corporations, it's $200,000. 5968@http://blog.inc.com/the-entrepreneurial-agenda/ 2009-06-16T17:06:00-05:00 http://blog.inc.com/the-entrepreneurial-agenda/2009/06/chamber_girds_itself_to_defend.html Having concluded that free enterprise, such as it is, is under siege -- with the government seemingly ready to capitulate to "many union leaders, some environmentalists, and a growing force of anti-business activists" -- the U.S. Chamber of Commerce is gearing up for a multi-million dollar defense. "Dire economic circumstances have certainly justified some out-of-the-ordinary remedial actions by government," said Tom Donohue, the Chamber's president and CEO, in a statement. "But enough is enough. If we don’t stop the rapidly growing influence of government over private sector activity, we will squander America’s unmatched capacity to innovate and create a standard of living and free society that are the envy of the world." 5952@http://blog.inc.com/the-entrepreneurial-agenda/ 2009-06-10T12:39:41-05:00 http://blog.inc.com/the-entrepreneurial-agenda/2009/06/when_entrepreneurship_hurts_he.html McAllen, Texas, and El Paso have a lot in common. Both are poor, both are 80 percent Hispanic, and both metropolitan areas are home to just over 700,000 people. But they are separated by nearly 800 miles of blacktop, and by one other very important measure: McAllen is the second-most expensive city for medicine in the United States, trailing only Miami in costs. Medicare spent $15,000 per McAllen enrollee in 2006 -- $3,000 more than the average personal income there. In El Paso, by contrast, Medicare spends just $7,500, slightly less than the national average. These statistics come courtesy of Atul Gawande, a doctor and journalist, who explored McAllen's high cost of health care in last week's New Yorker. The explanation is surprisingly arbitrary. The difference appears to have little to do with either the patient populations or the quality of care, which are comparable in each city. Rather, the culprit is an "across-the-board overuse of medicine." A look at Medicare and private insurance data found that, "compared with patients in El Paso and nationwide, patients in McAllen got more of pretty much everything -- more diagnostic testing, more hospital treatment, more surgery, more home care." But more care does not equal better care. In fact, says Gawande, citing a couple studies, "where medicine is concerned, it may actually be worse." 5936@http://blog.inc.com/the-entrepreneurial-agenda/ 2009-06-08T16:08:23-05:00 http://blog.inc.com/the-entrepreneurial-agenda/2009/06/health_insurers_no_reform_for.html We've heard much noise from the health care industry lately that sounds a lot like Kumbaya -- everyone, it seems is on-board with reform. Even insurers support market reforms that will limit their ability to rate potential customers on the basis of their health. Except, that is, when it comes to small business. The New York Times pointed out the inconsistency in an article published in yesterday's paper. While the insurance industry has agreed to regulation in the individual insurance market, it is apparently divided when it comes to the small group health market. The Times reports that Aetna and Cigna support regulating the small group market, but other big players -- particularly those with Blue Cross franchises -- have refused to take a public position. WellPoint, a large Blue Cross insurer, opposes small group reform. "Those markets generally work today," Bradley M. Fluegel, the company's chief strategy officer, told the Times. "They are well regulated by states." The Agenda suspects many of its readers would disagree. 5923@http://blog.inc.com/the-entrepreneurial-agenda/ 2009-06-04T11:27:01-05:00 http://blog.inc.com/the-entrepreneurial-agenda/2009/05/the_sba_lends_a_helping_hand_t.html The Obama Small Business Administration today promised to deploy yet another tool in its economic recovery "toolbox" to help beleaguered car dealers. Beginning in July, the SBA will allow its 7(a) program to back "floor plan" financing. Small-firm car dealers will be able to borrow up to $2 million to finance inventory; banks that make the loans will be able get a 75 percent government guaranty. Previously, 7(a) loans excluded this kind of inventory financing, which until recently was widely available elsewhere. On top of that, more dealerships will be eligible for the loans, thanks to "alternate size standards" announced at the beginning of May that enlarge the definition of small. Though not specifically targeted at car dealers, Administration officials at the time were quick to point out that the temporary rules would double the number of dealers that could qualify for loans. The new Dealer Floor Plan pilot program is available to any seller of titled vehicles or vessels, including motorcycles, RVs, mobile homes, and boats. 5887@http://blog.inc.com/the-entrepreneurial-agenda/ 2009-05-28T18:01:41-05:00 http://blog.inc.com/the-entrepreneurial-agenda/2009/05/sba_throws_small_biz_another_l.html Just in time for National Small Business Week (Yes Virginia, there is a National Small Business Week, and it has corporate sponsors!) the Obama Administration announced plans to implement another Small Business Administration program created by the February stimulus, this one designed to give firms behind on their loans a little breathing room. Beginning June 15th, the SBA will guarantee bridge loans up to $35,000 "to established, viable, for-profit small businesses." These "America's Recovery Capital" loans will be free of interest and fees, fully guaranteed by the SBA, and will offer deferred repayment. 5854@http://blog.inc.com/the-entrepreneurial-agenda/ 2009-05-18T15:16:37-05:00 http://blog.inc.com/the-entrepreneurial-agenda/2009/05/republic_resurrected_a_small_b.html These days, it doesn't take too much effort to find a business set to prosper in the stimulus economy -- just follow the contrails of Air Force One and Two. Last week, for instance, President Obama headed to Newton, Iowa, to highlight a company making towers for wind turbines in a factory originally built for Maytag. But it was Vice President Biden's visit to Serious Materials in Chicago on Monday that was most satisfying. Serious Materials is a California company that makes sustainable, green building products. This year, anticipating the new Administration's emphasis on energy efficiency -- if not the $8 billion worth of weatherization grants as well as more generous tax credits in the stimulus bill -- Serious has gone on a serious shopping spree. In January, it purchased the manufacturing assets of a bankrupt Pennsylvania factory and then rehired many of the 150 workers who lost their jobs. Then, in March, it bought the assets of Chicago's Republic Windows and Doors, which abruptly shuttered in December. 5762@http://blog.inc.com/the-entrepreneurial-agenda/ 2009-05-01T11:31:39-05:00 http://blog.inc.com/the-entrepreneurial-agenda/2009/04/is_the_fdic_selling_small_busi.html Last week, close readers of the New York Times might have discovered what appeared to be a bombshell: the Federal Deposit Insurance Corporation, cleaning up the bad loans of one failed bank, sold a small business loan for half of what the borrowers had themselves offered to pay to settle the debt. If true, it wouldn't likely be the only case -- small banks are dropping like flies. So far this year, 25 institutions have failed, as many as failed in all of last year -- and closing in on the total bank failures of the previous eight years combined. It's likely that a couple more banks will be added to the list tonight. What happens when a lender fails is this: the FDIC tries to work out new terms with borrowers in bad loans, who are very often small businesses. If this fails, the agency pools the loans and sells them for pennies on the dollar to investors, who are usually relentless in trying to collect. (The proceeds of the sale are used to pay back depositors.) In this case, according to the Times, the borrowers, husband-and-wife owners of a fitness studio in Arkansas who were $10 million in arrears, had offered to pay the FDIC $6 million upfront and another $1 million when the business was sold. The FDIC rejected the proposal, and instead sold the loan, according to the Times, "for 34 cents on the dollar, an outcome that left the gym owners furious, because the auction produced a price that was far lower than they had offered to pay the F.D.I.C." The investor is now trying to foreclose on the gym. 5737@http://blog.inc.com/the-entrepreneurial-agenda/ 2009-04-24T17:19:59-05:00 http://blog.inc.com/the-entrepreneurial-agenda/2009/04/why_obamas_small_biz_rescue_pl.html You might recall that a couple weeks back, the Obama Administration convened a "small business summit" to trumpet its efforts to shore up small business lending. Most notably, President Obama and Treasury Secretary Geithner determined that the Treasury Department would spend up to $15 billion to buy SBA-guaranteed loans. The idea was to loosen up SBA credit by unfreezing the secondary market for those loans; banks or middlemen who sell their loans to the government could then use the proceeds to make or buy new loans. So what's happened with that initiative? Nothing, according to the Washington Post. "Every major provider of these kinds of loans," the newspaper reported on Wednesday, "says the plan will not work as designed." 4446@http://blog.inc.com/the-entrepreneurial-agenda/ 2009-04-03T09:25:36-05:00 http://blog.inc.com/the-entrepreneurial-agenda/2009/03/the_specter_of_card_check_is_g.html The fight over the Employee Free Choice Act -- a.ka. "card check" -- appears to have ended before it even began. On Tuesday, Senator Arlen Specter, Republican of Pennsylvania, repudiated the legislation he co-sponsored in 2003 and 2005. In 2007, he voted against a filibuster of the bill. Back then, as Specter himself noted in a speech on the Senate floor, "50 senators, Democrats, voted for cloture and 48 Republicans against. I was the only Republican to vote for cloture." He would not, Specter announced, do so again. 4414@http://blog.inc.com/the-entrepreneurial-agenda/ On Capitol Hill 2009-03-27T15:27:55-05:00 http://blog.inc.com/the-entrepreneurial-agenda/2009/03/treasury_stands_ready_to_buoy.html 4373@http://blog.inc.com/the-entrepreneurial-agenda/ 2009-03-17T13:09:21-05:00 http://blog.inc.com/the-entrepreneurial-agenda/2009/03/sba_relents_on_goodwill_rule_f.html A few weeks ago, Agenda reader Roland wrote to say that just as Congress was bulking up Small Business Administration lending by passing the stimulus bill, "the SBA cut off the knees of the 7(a) program." The new SBA regulations taking effect March 1 limit the amount of goodwill that can be financed to $250,000. Almost all small businesses are service oriented and goodwill is a substantial portion of any SBA 7(a) loan. Heavy asset businesses with lots of machinery are top heavy with existing debt and usually do not produce cash flow (not good acquisition candidates). Plus, the banks will only value the hard assets at liquidation value as collateral anyway. The result will be no SBA 7(a) lending to small business over $300,000 in value. 4324@http://blog.inc.com/the-entrepreneurial-agenda/ 2009-03-03T14:13:31-05:00 http://blog.inc.com/the-entrepreneurial-agenda/2009/02/what_is_small_business_and_can.html A report on National Public Radio last Saturday laid out a debate that may soon reach Congress: how big can a business be to still qualify for the government's small business programs? Most of the time, the argument for increasing the Small Business Administration's size standards revolves around qualifying for federal contracts. That's a distressing proposition, since large businesses already find their way to competing for contracts intended for small firms, as organizations like the American Small Business League have demonstrated time and time again. 4307@http://blog.inc.com/the-entrepreneurial-agenda/ 2009-02-25T13:04:50-05:00 http://blog.inc.com/the-entrepreneurial-agenda/2009/02/congress_splits_the_difference.html There were big differences between the House and Senate approaches to supporting small business financing. The Senate largely proposed temporarily eliminating loan fees, which might improve demand for credit but does little to prod banks to lend. The House hoped to encourage lending with a variety of new Small Business Administration programs. Happily, the conference liked both approaches. The conference report will likely pass the Senate tonight. Since it passed the House today (with no Republican support), it'll become law this weekend. Here's what's in store for small business lending: 4275@http://blog.inc.com/the-entrepreneurial-agenda/ 2009-02-13T20:21:13-05:00 http://blog.inc.com/the-entrepreneurial-agenda/2009/02/chamber_vs_chamber_and_the_win.html 4274@http://blog.inc.com/the-entrepreneurial-agenda/ 2009-02-13T12:09:44-05:00