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Small Business Grants Vs ARC Loans

Small businesses are an important part of the American economy. According to the National Federation of Independent Business (NFIB), they supply roughly 55 percent of all jobs in the private sector, and they generate about half of all privately generated Gross Domestic Products (GDP), according to some estimates. There are over 27 million small businesses in the United States. They can be self-employed, home-based, Internet-based, and owned by men, women, and minorities, producing a very broad range of innovative products and services. Yet they continue to struggle in securing financing to start or grow their businesses.

Small businesses have always relied on commercial banks for business loans. The increase in bank consolidations has resulted in larger banks, making it more difficult for the small business owner to secure funding for their business. Since more than 60% of small businesses rely on credit lines and loans, and the bulk of this financing comes from the banking sector, small businesses are increasingly looking for more sources to fund their businesses.

The good news is that there are many other sources available for small business owners, including government-backed loans, and grants. The major difference between the two is that loans need to be repaid; grants do not. However, the U.S. government, recognizing the important role that small businesses play in our national economy, recently announced the availability of interest-free ARC loans. Grants and ARC loans offer two additional sources for small business funding that are worth investigating.

Business Grants

Grants are not loans. Grants are free money that does not have to be repaid. Government grants are offered only to local and state, educational, and public housing organizations, and non-profits, and do not apply to start-ups. In addition, the government may offer some specialized grants to companies engaged in environmental efforts like energy efficiency and recycling, as well as businesses that train youth and senior citizens on the latest technology. That’s why they are referred to as “special purpose grants.” So, where do other small businesses go for grant money?

Grants are available from local government agencies and private corporations and organizations. Some of the private sources include trusts and foundations such as the Gates Foundation, the Lilly Endowment, Ford Foundation, Hasbro Industries Charitable Trust, W. K. Kellogg Foundation, the Kipling Foundation, Clorox Company, Allstate Foundation, and International Paper Company. Each source has their guidelines on what type of business will qualify for grant money, and the business owner must meet the criteria. Grant money can be as small as $500 or as large as $5 million. The application process is long and tedious, requiring the applicant to present a solid business plan. The competition for grants is keen with no guarantee that the applicant will receive the money. But for small businesses who qualify and are willing to tough it out in order to get free money, it is worth it.

ARC Loans

Business loans in general differ from grants in that they need to be repaid, with interest. In addition, grants are based on the presentation of a well-written business plan, while loans are based on credit scores and often require collateral.

Recently, however, the U.S. government announced a new program of interest-free loans called ARC (America’s Recovery Capital) loans, an extension of the 2009 Recovery Act, offered through the U.S. Small Business Administration (SBA). ARC loans provide up to $35,000 (one time only) of interest-free money specifically to small business owners to help them pay down debt on other loans. In essence, it buys them time to get back on their feet. The loans are available until September 30, 2010, or until the funds are depleted (only 10,000 loans are available), and are offered through SBA lenders only. SBA pays the fee to the lenders; the borrower pays back only the principal. Other specifics on ARC loans include:

* Only private, for-profit enterprises up to 500 employees are eligible; non-profits are not eligible
* Business must be at least two years old
* Business must demonstrate an immediate financial hardship
* Loan money can only be used to pay off existing outstanding small business debt
* Loan money is paid out to the borrower over a six month period
* Repayment of the principal begins after the last loan disbursement is received
* Borrower has up to five years to repay the loan principal

The new ARC loans offer both advantages and disadvantages. The advantages include instant cash flow improvement, more money to re-invest in the business, and more time to restructure the business and position it for future success. For some small businesses, it is just what they need to survive. For others, the disadvantages include the strict criteria for qualification and use of ARC loan money. In addition, unlike grant money that does not have to be repaid, ARC loans need to be repaid. So, a small business owner who meets the qualifications must present a solid business plan that convinces the SBA lender they will be in a position to repay the loan within the time period allotted. That is the risk for the borrower, the lender, and the SBA who is guaranteeing the new ARC loans.

Auction Listings Are Vital to the Success of Fundraising Auctions

Fundraising Auction Tip: You should always provide potential bidders with a printed Auction Listing of both your Live and Silent Auction items at any Fundraising Auction. A printed Auction Listing is vital for several reasons:

An Auction Listing informs bidders of the order of sale, and what is coming up next. If you keep your bidders guessing, they will simply not bid.

If bidders are not 100% certain of what they are bidding on, they will not bid. A printed Auction Listing should answer any and all questions about what is being sold in order to encourage bidders to bid as much as possible.

Bidders often need time to plan their bidding strategies, especially on multiple and/or larger value items. A printed Auction Listing helps them to do that.

Couples often need time to consult with each other about what they are willing to spend on something. A printed Auction Listing helps them to do that.

Potential bidders need to know the specifics, the benefits, and the restrictions on any item they are going to bid on, especially on travel and/or other higher value items. A printed Auction Listing should answer all of their questions, in writing.

After bidders see that they have lost an item to another bidder, a printed Auction Listing makes it easier for them to re-strategize on what else they can bid on.
Printed Auction Listings generally come in 3 forms:

Printed in the Event Program or Auction Catalog.

Printed on loose sheets of paper and hand-inserted into the Event Program or Auction Catalog.

Printed on loose sheets of paper and hand-delivered to all attendees, or left on each dinner table in the room.
Auction Listings cost practically nothing to produce and they can make the difference between the success and failure of a Live and Silent Auction. You should never conduct a Fundraising Auction without one.

A Case Study

Let me share a real-life experience with you. Once I was hired to conduct a Fundraising Auction for a nationally renowned organization. The event was held in a major hotel, in one of the country’s largest cities, with several hundred “black tie” participants attending. It was an extremely professional event, with the music, singing, lighting, speeches, and awards all perfectly timed and choreographed. Everything was done to perfection… exception the Fundraising Auction.

Although I had signed an agreement to serve as their Auctioneer nearly one year in advance of the event, no one bothered to contact me for any advice or help. Approximately one week prior to the Auction date, I contacted the group to see if they had replaced me with another Auctioneer. But they said that I was still their man.

Upon arriving at the event I asked for a copy of the Auction Listing. I was told that there were none. I’m not sure whether they felt that the Auction Listing wasn’t necessary, or whether someone forgot to have them printed. This was never made clear. When I asked what I was to use at the podium, I was told to copy the list of Live Auction items from a committee member’s computer. It took me about 30 minutes to copy three pages of hand-written notes in order to prepare for my role as their Auctioneer.

I knew that they had created a PowerPoint program showing the various Live Auction items. When I asked whether the PowerPoint slide order corresponded to the order of sale I had copied from the committee member’s computer, I was met with a blank stare. The committee member left to check the slide order, and returned to let me know that the slide order did not correspond my notes, and he provided me with the correct slide order… hand-written on a paper napkin. This forced me to re-arrange my three pages of hand-written notes before taking the podium.

There was a Live Auction Table with descriptions of the Live Auction items that were to be sold, but the table was not clearly marked, and it received significantly less attention than the Silent Auction Tables, which were clearly identified. Since the Live Auction Table was located adjacent to the “Raffle Table”, it appeared that most people thought it was part of the raffle and therefore paid very little attention to it.

According to the event program (which did not include an Auction Listing), I knew approximately when I was to begin the Live Auction. At the designated time the Master of Ceremonies announced the start of the Live Auction to the several hundred people in attendance, and introduced me as Auctioneer. As I approached the podium I realized that photographs of award winners were still being taken… directly in front of the podium where I was to stand… which required me to stand aside for several minutes until the photographers were done. Can we say “awkward moment”?

As the photographers cleared, I approached the podium and began my Live Auction introduction. Approximately one minute into my introduction, the “Raffle Committee” approached the podium and stopped my Live Auction Introduction in order to pull the 8 or 9 Raffle Winners. These drawings lasted about 5 minutes. Upon it’s conclusion I was allowed to resume the start of the Live Auction.

When standing at the podium two intense and extremely bright spotlights were pointed directly at the podium. The lights were so bright that I literally could not see the center 1/3 of the room. I could see the tables on the right, and on the left, but was totally blinded when looking straight ahead. It took perhaps five minutes before the spotlights were turned off.

While at the podium and describing Lot #1, I had to ask someone to start the Lot #1 PowerPoint Slide… because apparently no one was assigned that job.

So with only the Auctioneer’s verbal description, and a PowerPoint slide, it appeared that few people in the room had any idea about what we were selling… or when we were selling it… until it was announced by the Auctioneer. As a result, bidding was extremely light and the final results fell several thousands of dollars short of where they should have been
The learning experience is this:

The Live Auction is where you place your better items, and where the real money should be made at any Fundraising Auction. Let bidders know as far in advance as possible what you will be selling, and the order of sale, so they can get excited about the Auction, and plan their bidding strategy accordingly.

Auction Listings are absolutely vital to the success of both Live & Silent Auctions. In my opinion, revenues at this Auction fell thousands of dollars short of where they should have been, because no Auction Listing was provided to the guests.

If bidders are not perfectly clear on what is being sold, including both the item’s specifics, benefits, and restrictions, they will not bid.

When you have a committee of volunteers, especially volunteers having full time jobs and/or very busy schedules, the services of a professional Fundraising Auctioneer can help to keep the committee on track.

And once you retain the services of a professional Fundraising Auctioneer… use the services that you are paying for.

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Could Starting A Home Based Business Be A Profitable Way For You?

In a time where the economy is chaotic and security in a 9-5 job is something from the past, a lot of people go on the internet to find ways to earn money. It is a fact that people are losing their jobs without having any backup plan, to assist them and their loved ones. And let’s be honest, wouldn’t it be cool if you could build a business from your home in your spare time, while still having your normal job. You then have an extra income if that is what you prefer. I personally believe that starting a home based business is going to be more and more popular over the next few years as it has been for several years. What is fascinating is that in the future, the home based business industry such as Network Marketing will be responsible for generating the most millionaires world wide. This is truly an amazing foresight because it gives the average person the opportunity become financial independent without first having to, go to school for 3-7 years in order to learn the skills required for the chosen vocation. One of the unique and splendid things about starting a home based business is that in the process you can earn while you learn.So, Could starting a home based business turn out to be a profitable investment of time and money..?The fact is that too many people don’t make a respectable seize of money in this industry which result in them leaving the industry. But this doesn’t mean that people are doomed before they even enter the industry. It just emphasizes that you need to make a clear decision and commitment to become successful no matter what it takes and how many struggles you have to over come.See, some of the differences between starting a home based business and getting a normal job is that you receive the exact amount of money equal to what you provide of energy and value to the market, in a home based business. In the majority of jobs you wouldn’t be motivated to work harder than you already do, because you know that you will get them exact same salary as last month.Knowing that this kind of business challenges the way you used to think and that you suddenly have carry all the responsibility yourself, will turn a lot of people off. These kind of people are looking for a safe and secure job but as mentioned before that era is over and if these people don’t make a choice to take full responsibility for their financial future they could sadly wind up losing everything they own.To make it profitable in this industry, you first want to start on a journey of constant and never ending improvement of yourself. By that I mean reading books on self improvement, goal setting, success, sales, prospecting and human psychology. Reading this stuff will give you more awareness of yourself and your surroundings. You will also experience more discipline and clarity as you indulge yourself with this type of knowledge. Second you want to find out what exactly it is that you want or how much money you want to earn and then get to work, right away.. Learn everything that you can get your hands on in the industry, committing yourself to becoming excellent in your particular niche and you are well on your way to make serious profits when starting a home based business.

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