Just 3.7 percent of high-level job seekers exiting the program were starting new businesses down from 7.6 percent in the first half of 2009 and 9.6 percent in the second half of last year, according to a survey conducted by the company on July 19.

Experts suggest that an improving job market and the difficulty getting small business loans may be steering people away from entrepreneurship, said Business Week.

Federal Reserve Chairman Ben Bernanke said last week that small businesses, and especially startups, are crucial to job growth and economic recovery. Bernanke once again called on banks to loosen credit to small businesses.

Some see the lower startup rate as a sign that the economy is improving. The unemployment rate is still high, but the private sector added 593,000 jobs in the first half of 2010, according the Bureau of Labor Statistics.

Startup activity typically increases as the economy improves, Challenger CEO John Challenger said in a statement.

Bernanke urged banks to loosen lending to smaller companies at a Fed conference Monday, saying that small businesses employ about half of all Americans and account for 60 percent of job creation.

Startups are especially vital, Bernanke said. Over the past 20 years, startup businesses accounted for about a quarter of all job creation.

Meanwhile, big companies are building up their cash reserves and are expected to report strong earnings in the coming week, said the Associated Press.

According to the National Federation of Independent Businesses, roughly one-third of small businesses seeking credit have had trouble getting it. Banks counter that the demand for credit remains weak.

Several big banks, including Bank of America, JPMorgan Chase and Citigroup, have pledged to increase small business lending this year. Total lending to small businesses has continued to decline, however, dropping from around $710 billion in the second quarter 2008 to less than $670 billion in the first quarter of this year, said the AP.

A number of small business owners say they are relying on personal credit cards or dipping into their own savings to stay afloat.

Using the Monte Carlo calculator, one can run a number of potential scenarios for retirement. What will happen to your nest egg if you have unexpected long term medical expenses or there is a sudden crash in the stock market, or an increase in tax rates. Rather than worrying about it, you can plug in the numbers into a calculator, and see how it would effect your retirement fund and adjust accordingly. The difficult part, of course, is to make interpretations of the probable output that a retirement fund may accrue and to know the reliability of these results.

The Monte Carlo calculator analyzes and predicts the potential yield to your retirement portfolio, from the history of your investment phase. Rather than assuming a static rate over a period of 30 years, this retirement planning tool accounts for variations over the long period and the potential effect of those variations over the long haul. However, this tool has been controversial having a range of different outputs depending on the assumptions entered into the tool. Therefore, the real question is, how does one use the Monte Carlo simulation tool in an effective way? The key is using it to track ballpark progress rather than using it as a predictive measure.

The most sound advice we could offer about the Monte Carlo simulation tool is that it is a useful tool to see how potential scenarios would effect your potential retirement fund. But as you are building up your nest egg, we would not recommend “putting all your eggs in one basket” by relying only on the results of the Monte Carlo simulation.

The new rules, outlined in a March 16 Associated Press story, have those banks reporting monthly on how much they lend to small businesses. All others are being called upon to make an “extra effort” to boost small business lending.

The announcements came March 16 as part of a broad package aimed at small business that was being unveiled by President Barack Obama and Treasury Secretary Timothy Geithner, the AP said. The package also includes reduced small business lending fees and an increase on the guarantee to some Small Business Administration loans.

“We know that small businesses are the engine of growth in the economy, and we absolutely want to do things to help them,” Christina Romer, who heads the White House Council of Economic Advisers, told the wire service. “There are already a lot of things to help them in the recovery package, and some of what will be coming out are the things that were in the recovery package: increasing the SBA loan guarantees, lowering fees.”

Republicans appeared to embrace the efforts, but with some qualifications.

U.S. Rep. Eric Cantor of Georgia said: “We’ve got to do something to help these small-business people. We know that they’re the job creators in this economy. And the problem … I think we’re seeing out of the Obama administration is a lack of focus on how to get things going again.”

The new measures have the government stepping in to buy loans, temporarily eliminate upfront fees of up to 3.75 percent and some processing charges on certain SBA loans typically passed along to borrowers, the AP said. It also increases the government guarantees on certain loans to 90 percent, up from 85 percent for loans below $150,000 and 75 percent for larger loans.

Ramberg, who anchors the MSNBC weekly show on small business, continued in her March 18 blog post:
“Maybe I’m missing something here, but small businesses are the lifeblood of the economy, and they are struggling right now largely through no fault of their own. They can’t get loans because the big boys messed up the system; and the faltering economy — caused in large part by the big financial firms — is also taking a big bite out of their sales,” Ramberg wrote. “All they want is a little bit of a break. So many entrepreneurs I’ve profiled in this blog — and many of the ones who post comments here — are struggling to keep their doors open.”

The impetus for her outrage came from a recent proposal by President Barack Obama to boost declining lending on Small Business Administration-backed loans. The idea was to do such economy-stirring efforts as directly purchasing up to $15 billion of securities backed by loans from the SBA, eliminating fees and increasing loan guarantees.

But it soon ran into criticism, she said, citing a Wall Street Journal story that worried the Obama administration could be creating incentives for another run on unwise credit and create a huge pool of unregulated money.

“I’m all for putting a lid on the bailout free-for-all with tougher standards and regulations,” she wrote, “but isn’t it odd that when small businesses want a helping hand suddenly the scrutiny reaches a fever pitch?”

Acting SBA Administrator Darryl K. Hairston in a Feb. 10 release praised the Federal Reserve Bank of New York and the latest version of its Term Asset-Backed Securities Loan Facility, or TALF.

“If we want to thaw the credit markets for small businesses, we absolutely have to get the secondary market for small business loans moving again. TALF is a critical element in doing that,” he said. “SBA supports this program and we’re glad the TALF is moving forward with some changes we asked for that will make SBA lending more attractive for 7(a) and 504 program lenders.”

The goal of TALF is to help unfreeze recession-battered credit markets and its revised terms and conditions were announced on March 3 by the Federal Reserve of New York.

The revisions include a reduction in the interest rates and collateral haircuts — a percentage subtracted from the market value of the collateral — for loans secured by asset-backed securities guaranteed by the Small Business Administration or backed by government-guaranteed student loans.

The Reserve said in a release that TALF was “designed to catalyze the securitization markets by providing financing to investors to support their purchases of certain AAA-rated asset-backed securities. These markets have historically been a critical component of lending in our financial system, but they have been virtually shuttered since the worsening of the financial crisis in October. By reopening these markets, the TALF will assist lenders in meeting the borrowing needs of consumers and small businesses, helping to stimulate the broader economy.”

Under the announcement, the Federal Reserve Bank of New York will lend up to $200 billion to eligible owners of certain AAA-rated ABS backed by newly and recently originated auto loans, credit card loans, student loans, and SBA-guaranteed small business loans.

Issuers and investors in the private sector are expected to begin arranging and marketing new securitizations of recently generated loans, and subscriptions for funding in March will be accepted on March 17, the Reserve said.

On March 25, those new securitizations will be funded by the program, creating new lending capacity for additional future loans, it said.

The program will hold monthly fundings through December 2009 or longer if the Federal Reserve Board chooses to extend the facility.

“SBA is optimistic the TALF will help unfreeze the secondary markets and help restore liquidity to the small business lending industry,” Hairston said. “We’re going to keep working closely with the Federal Reserve and the Treasury to make this program successful.”

In a Feb. 10 Reuters story carried by Businessworld , Treasury Secretary Timothy Geithner was set to lay out a rescue plan based on a mix of public and private funds to wipe clean $500 billion of such troubled assets.

While details were light, Reuters reported that sources said the plan would also extend a Federal Reserve program allowing the U.S. central bank to extend up to $1 trillion in loans.

But what was clear in the days following the announcement was that the U.S. had learned from the shocking failure of investment bank Lehman Brothers, which went under in September, marking the largest bankruptcy in U.S. history, and would not let other banks fail.

The plan also included a huge boost in the government’s stakes in one key bank, Citibank, bringing it up to a possible 36 percent, reports said.

Geither’s plan follows a Feb. 9 press conference where President Barack Obama told reporters that cleaning up banks’ balance sheets was a priority and didn’t rule out the possibility that it will take more money than the $700 billion Congress already has approved to complete the job, Reuters said.

“We don’t know yet whether we’re going to need additional money or how much additional money we’ll need until we see how successful we are at restoring a level of confidence in the marketplace,” Obama said.

Obama then called on Congress to speedily approve both Geithner’s plan and an economic stimulus package to complement the revamped bank-rescue proposals, Reuters said.

“If you delay acting on an economy of this severity, then you potentially create a negative spiral that becomes much more difficult for us to get out of,” Obama said. “This is not your ordinary, run-of-the-mill recession, we are going through the worst economic crisis since the Great Depression.”

Geithner, the former president of the New York Federal Reserve Bank, said banks will be closely monitored and tested.

“The spectacle of huge amounts of taxpayer money being provided to the same institutions that helped cause the crisis, with limited transparency and oversight, added to public distrust,” Geithner said in remarks prepared for delivery after the release of the new measures, Reuters said.

The Federal Deposit Insurance Corp. and the state Division of Finance and Corporate Securities found the Silver Falls Bank to be operating with inadequate capital, having a large number of “poor-quality” loans and engaging in “unsatisfactory” lending and collection practices, according to a Jan. 7 article in the Oregon Statesman Journal.

The charges stem from a routine evaluation conducted by the FDIC and state officials in April.

The order, dated Nov. 24, notes the termination of an employee who received a bonus based on total dollar amount of loans generated, the Statesman Journal said, and that investigators found the worker didn’t adequately assess risk. That arrangement was nixed and future incentives must take into account the quality and risk associated with each loan, the paper said.

Richard Renken, program manager for banks and trusts in Oregon, told the paper it was the first time Silver Falls Bank has faced such charges.

The bank’s President and Chief Executive Officer Stephen Way said many of the stipulations already have been addressed, and that many of them were handled voluntarily.

“The economy changed very quickly at the beginning of the year,” Way told the Statesman Journal. “Homes just stopped selling. And we had a fair amount of construction loans.”

He also noted about 80 percent of the bank’s bad loans derived from the loan officer who was fired in June.

“We’ve made substantial reductions in past-due loans, by approximately a third since November,” Way said, adding that despite the stipulations, business was running as usual and they were making loans and raising capital.

The bank’s deposits are insured by the FDIC for as much as $250,000 per individual account.

This article was submitted by Kathleen O’Connor, a contributing writer for Biz2Credit. Biz2Credit is a small business marketplace that provides entrepreneurs with the latest industry news and financial advice. Send all questions to info@biz2credit.com.

Answer: The simplest and easiest way to build business credit is to register your business on www.dnb.com and get a DUNs Number. Corporate clients often verify a company’s track record by checking trade references in Dun & Bradstreet’s database, the largest repository of business information in the world. Visit D&B’s Web site to get your DUNs number.

For example, sometimes personal credit reports show outstanding student loans for amounts already settled or a late payment fee for a bill that was received after the due date. If you’re relocating your business, keep track of your utility, medical and credit card bills which accrue large late fees if they get lost in the shuffle. All situations lower the individuals score and should be immediately tended to. Personal credit adjustments can take anywhere from two to four months.

Likewise, small business owners should track their business credit report on Dun & Bradstreet (D&B) to check for inaccuracies in the business description, supplier payment history or existing liens on the business. Because D&B reports are self-reporting they frequently contain wrong information. Adverse remarks can affect a business’s ability to procure capital or contracts from the government or large institutions.