Small Business Does Not Believe The Recession Is Over
An announcement from The National Bureau of Economic Research (NBER) says the U.S
. economy hit rock bottom in June 2009 and has been on the rebound ever since. Was this an official end to the recession that began in December 2007? And, could this be the beginning of an expansion?
NBER said the recession lasted 18 months, which makes it the longest of any recession since World War II. Economic conditions since that month have not been very favorable. The organization did concede the economy has not yet returned to normal.
Small business owners along with consumers who have been without jobs for months don't agree the recession is over. In fact most small businesses continue to struggle, and many are barely making it. The ones that are are using every financial tactic they can, including invoice factoring - since many of their invoices are outstanding, and clients are paying more than 60 to 90 days out.
Could your small businesses be receiving tax breaks if you invest in new equipment or plants? Yes, this is a true fact, and in fact the Small Businesses Job Act will also double your current expense limit. And according to the latest proposal from Washington, business owners can also write off 100 percent of the investment in a year as opposed to a series of deductions over the years.
However analysts are seeing one thing wrong with this picture -- most small businesses aren't making expenditures that exceed the current $250,000 expensing limit! So it only stands to prove that only a few businesses will benefit.
The Small Business Association (SBA) sees a business as one that is organized for profit; has a place of business in the U.S.; operates within the U.S. or makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor; is independently owned and operated; and is not dominant in its field on a national basis. The business may be a partnership, sole proprietarship, or a corporation.
The SBA established "size standards," for all for-profit industries, and these standards represent the largest size that a business, including its subsidiaries and affiliates, may be to remain classified as a small business concern.
The majority of smaller businesses will not benefit from the proposed tax break. What's more they also agree that few single solutions work for every business. But there is one solution that does work for almost any business, and that is accounts receivable factoring. Factoring companies have been successfully helping small to medium-sized businesses stay afloat.
A new monthly survey by Discover Financial Services, says 62 percent believe the economy is getting worse. The company's August survey of 750 small business owners nationwide revealed that 55 percent economic conditions for their business to be unfavorable in the next six months. The largest month-on-month decline since November 2009, the company said that these factors caused its Small Business Watch index to drop 10 points between July and August.
Businesses are struggling nationwide, but some have survived thanks to tactics including prudent thinking, working harder and leaner, and good financial strategies like. Here are some of the most frequently asked questions and answers:
Q: How quickly can I receive funding from an invoice factoring company? A: Most factors pay in as little as 24 to 48 hours.
Q: Is it OK if I am selective about the invoices I sell? A: Yes and in fact most factoring companies do not expect to buy 100 percent of your receivables.
Q: How much can you advance against invoice? A: Some factoring companies will advance up to 90 percent against invoices you are selling.
Q: How much will factoring cost? A: Fees are competitive. Each client's circumstances will vary and may have an impact on the fees.
by: Kristin Gabriel
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