Apple Inc is planning to undergo a major expansion. The company that has products like the iPhone and the iPad is now targeting small business. They are planning to hire engineers in at least a dozen U.S retail stores to install Apple computer systems meant for small businesses.

This expansion makes sense given that there are already thousands of businesses that run on Apple products, the company has now focused on consumer and niche markets such as media firms and design. Apple wants to use the iPhone and iPad as selling points to leverage more expensive products like Macintosh computers and servers. It is using its 300 retail stores to reach out to local businesses. Apple is also recruiting from within the sales staff so as to form a specialized team to negotiate leasing and pricing terms for customers.

It is unlikely that Apple would be facing more competition from competitors like Hewlett-Packard Co. and Dell Inc. But Apple is eyeing the $310.8 billion that North American businesses are expected to spend on information technology this year. The figure will rise to $328.3 billion in the coming year. By capturing the sales, the annual revenue of Apple can grow up to 46% amounting to $62.6 billion in the current year. Brian Marshall, analyst in Gleacher & Co., says, “They’re well aware of the opportunities in business. This is something they’re focusing on even if they’re not talking about it publicly.”

A Virginia-based MacPro Solutions owner, Allen Cleaton, says, “Almost half of our new customers come from the Apple Store.” Cleaton can find local business as Apple’s general staff do not have the expertise to handle set up and maintenance of business computer networks. Apple just maintains an expert team for government agencies and big companies. As far as small and mid-sized businesses are concerned, it currently hands over responsibility to its retail stores. But now, Apple is updating its retail stores with conference rooms meant for meetings between sales team and higher echelons of business executives in order to equip their expansion plans.

We’ve heard how difficult it is for small businesses to secure bank loans, a new Fed report says that banks have been very willing to issue small business credit cards.

About 75 percent of applicants in 2009 were approved for small business credit cards, according to the report . Even among businesses considered high-risk, 72 percent were approved for a credit card.

In general, credit card loan terms are worse than regular loan terms. The average interest rate on a business credit card in 2009 was about 12 percent and cash advance interest rates 20 percent or more, says the report.

Credit card issuers can also change the terms of the loan or revoke credit card lines altogether. Business credit cards are not subject to the consumer protection afforded by the credit card reform bill passed last year.

While over 80 percent of small businesses use credit cards, only 12 percent borrow (carry over a balance from month to month) on credit cards.

If small business owners worry about borrowing on credit cards, they won’t invest in long-term businesses planning or growth, says CNN.com . And that means they won’t invest in hiring, the linchpin in reviving the economy.

The Federal Reserve Chairman, Ben S. Bernanke, expressed his solidarity for the Nation’s small businesses and urged banks and financial regulators to grant them loans for their success. Small businesses are responsible for 60% of job creation and employ almost half of all Americans. But the lending to small businesses show a decline in the last two years. Bernanke expressed his concerns and acknowledged the uncertainty in a daylong forum at the Fed’s headquarters.

Federal data reveals that lending fell below $670 billion in this year’s first quarter, a huge collapse, compared to $710 billion granted in second quarter of 2008. “How much of this reduction has been driven by weaker demand for loans from small businesses, how much by a deterioration in the financial condition of small businesses during the economic downturn, and how much by restricted credit availability?” Mr. Bernanke asked. “No doubt all three factors have played a role.”

A fall in the value of collateral and real estates that are used to secure loans is one reason for the decline. Borrowing based on personal credit cards and retirement accounts also posed problems. Even for businesses with strong cash flows but with depreciated value of collateral, obtaining credit for their expansion has become increasingly difficult.

Banks say that meritorious borrowers are granted loans and economists too agree that there is no evidence of refusal to lend. It’s only that banks have resorted to traditional underwriting standards after being too lax. Economists also argue that battered balance sheets and weak economic fundamentals have lowered new lending.

“Credit’s not an issue, Customers are the issue”, said William C. Dunkelberg, economist at Temple University. He reiterated that companies are still cutting on inventory and capital spending is at a 35 year low. But, Kevin P. Watters, chief executive at JP Morgan Chase, said banks are considering borrowers who were initially denied loans.

Citing new research, Bernanke said that in the last 20 years it has been seen that companies less than two old have generated a quarter of gross jobs in America which is certainly a reason to continue lending to small businesses in this recession.

The economy will not recover until banks start lending to small businesses, said Federal Reserve Chairman Ben Bernanke.

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.

The rules of Wall Street are being amended to better regulate the US financial System. Congress provided a rewrite of the rules that was submitted to President Obama on July 4th. After a 20 hour session of the House and Senate negotiators, a bill has been approved that envisages a ban on the bank’s proprietary trading and provides more oversight to the US financial market. The House and Senate are all set to vote on this measure and congressmen have conveyed that no further amendments will be added to the bill. Some of the major provisions that law makers in Washington agreed to in the Wall Street rules include the following:

Volcker Rule

Named after Paul Volcker, former Chairman of The Federal Reserve, the rule bans banks from proprietary trading. Banks can invest in private equity and hedge funds but are capped at 3% of the fund’s capital. For Tier 1 capital, the investment can be more than 3%. This is an amended provision from the bill introduced in May, when banks were completely barred from investing in hedge funds and private equities. This change was made in response to the Massachusetts Republican, Senator Scott Brown, whose concerns were that the ban would torment Boston-based State Street Corp. Brown along with three other republicans was the first to vote for the Senate bill, breaking party ranks. Proprietary trading is now defined as a principle for trading account of banks and financial institutions that are supervised by the Fed for purchase, sale or any other transactions. Any bans on proprietary trading actually reduce profits. Goldman Sachs says that 10 percent of its annual revenue comes from proprietary trading.

Derivatives

In a last minute deal, lawmakers for the first time introduced a regulatory structure for $615 trillion in the counter derivatives market. This provision will push banks to use some of their swap trading into subsidiaries. This will reduce the taxpayers’ risk by barring their trades from institutions that receive federal benefits. Senator Blanche Lincoln, chairman of the Senate Agriculture Committee actually introduced the original proposal to ban all swaps-trading by commercial banks. But, later there were negotiations among all parties, secretaries and directors whereby it was agreed that banks can maintain their trading operations until and unless they are used to trade interest rates or hedge risk or foreign exchange swaps. Now, federally insured banks will get two years time to clear un-cleared default swaps to separate capitalized subsidiary.

Consumer Bureau

A protection bureau at the Federal Reserve to police banks and financial services against abuse from credit-card and mortgage-lending, will be created. This plan is in opposition to the opinion of Republicans and financial industries. Obama proposed a stand-alone consumer agency to prevent financial crisis. Travis Plunkett, the Director at the Consumer Federation of America, said “It’s an agency with considerable authority to protect consumers from abusive financial practices, which is a landmark achievement.”

This bureau will be an independent authority though it will be housed at the Fed. It will be responsible to write consumer protection rules for banks and firms that offer financial services and will be headed by a director appointed by the president. It will enforce rules for firms with more than $10 billion in assets.

Credit, Debit cards

The Federal Reserve will have the authority to limit swipe fees during debit card transactions. Now retailers can refuse credit cards for less than $10 purchases. U.S. merchants pay interchange fees in Visa and MasterCard debit cards. Last year, the fees amounted to $19.7 billion and accounted to 1.63 percent on an average for each sale.

Oversight Council

It is meant to establish financial stability. The ‘Oversight Council’ will monitor large Wall Street firms and other real players and would respond to system risks. It will be headed by the treasury department. With 2/3 of the vote, the council can leverage capital requirements on lenders and bring hedge funds and broker dealers under the Fed’s authority. It will also have the power to force companies to divest their holdings if they become a threat for the financial stability of the country.

Bank Capital Rules

Introduced by Senator Susan Collins, the bill will force some banks to show their capital. It is going to show its impact on ‘Trust Preferred Securities’ (TruPS). Banks with $15 billion in assets will find 5 years time to replace TruPS with common stock and other securities. It is found that smaller lenders sold $45 billion in TruPS out of the $150 billion issued by US banks. According to Richard Bove, analyst at Rochdale Securities, smaller banks like McLean, Capital One Financial Corp. & Buffalo and M&T Bank Corp would be hurt the most as they heavily rely on TruPS.

The Federal Reserve

The Federal Reserve will possess a broad supervisory scope and will bring transparency to its 96 year history. Headed by Chairman Ben S. Bernanke, a new Financial Stability Oversight Council will be created that will deputize the Fed to implement tough standards for disclosure, capital and liquidity. The rules will be the same for all financial companies and banks that pose a financial system risk. The Fed’s bank supervision was earlier curtailed but now the bill would allow the Fed to keep supervising banks like Goldman Sachs, Bank of America and Central Virginia Bank shares Inc, which have assets around $471 million.

There are also other provisions under this bill that enforces amendments in segments such as Credit Raters, Private Equity, Failed Firms, Risk Retention, Fiduciary Duty and the Insurance Industry. The changes have helped to regulate discrepancies in the US financial system with concessions granted to taxpayers and banks.

Credit unions are lobbying Washington to lift the cap on lending rules that have been in effect for 12 years. Currently, credit-union lending is limited to 12.25% of a credit union’s total assets. The Credit Union National Association is pushing to raise that limit to 25% of total assets.

The vast majority of credit-union loans go to small businesses. CUNA estimates that a change in the law would enable them to extend up to $10 billion in additional business loans.

Banking lobby groups oppose the legislation, saying that an increased cap would create a distorted competitive environment detrimental to community banks, also big lenders to small businesses, according to an article in the Wall Street Journal.

Credit unions were created to provide financial services to people of modest means, and members pay a small fee to join. They are member-based organizations with non-profit tax status – another bone of contention for the banking lobby. Credit-union lending to small businesses increased in 2009, while lending by community banks decreased, according to the WSJ.com article.

Banks contend that there is not enough oversight on credit-union loans, so customers are more likely to default on their loans.

Small business owners who were approved for credit-union loans after being turned down by banks said they faced a rigorous application process at the credit unions.

Matthew Rembe, owner of Los Poblanos Inn and Cultural Center in Albequerque, received a $3 million loan from a credit union to expand his business after a year of getting turned down at banks.

“There was major due diligence,” Rembe told the WSJ.com. “In the past we’d gotten easy money, so it was not what we were used to at that point.”

The leading financial institutions are taking proactive steps to commit themselves to supporting small businesses. Goldman Sachs Group, Citigroup, and Bank of America are the frontrunners in this movement and have announced separate programs to attract SME entrepreneurs. The change comes in response to the Obama administration’s stress on banks to increase their lending to small businesses.

Community development financial institutions, CDFIs are funded largely by banks like Goldman Sachs and Citigroup. Goldman has decided to funnel $300 million and Citi has announced that they will provide $200 million to CDFIs. Citi’s initiative comes at a time when its loans to SMEs have dropped from $10.2 billion to $9.5 billion from last year. But Citigroup’s director commented that ‘this program does not intend to make up for the decline because it targets business owners that are outside the scope of Citi’s traditional lending reach.’ This current program is termed by Citi as ‘Communities at Work Fund’ and it will enable CDFIs to request for five year loans to lend to qualifying business firms. The program under Goldman Sachs is still in its pilot stage, but it is expected to reach out to 10,000 businesses in the next five years. Additionally, Goldman has committed itself to providing $200 million for educational programs and community colleges.

Bank of America has a more aggressive approach to increasing their small business lending. BofA promises to increase its funding to SMEs by $5 billion in 2010. Last year BofA lent $81.4 billion and by May of this year it already loaned out $19.4 billion. The bank will lend more than $22 billion in each of the next three quarters.

This fiscal year, the rates of the Federal Reserve have remained mostly unchanged. After a policy-setting meeting today, officials of the Federal Reserve have reiterated that rates will remain at low levels for an extended period of time. And with that announcement, there continues to be uncertainty about a possible recovery of the economy in the near future.

On average, economists do not see any chance of rates of the central bank changing before 2011. The ‘economic forecasting survey’ conducted this week by The Wall Street Journal had a similar toll when expectations of economists to see an increase in rates were very bleak. The current 0-0.25% rates seem longstanding as the futures markets expect a 45 % chance of its sustenance. Paul Ballew of Nationwide says that “There are lots of reasons to stay on the sidelines– no reason to move.”

Discouraging statements by Fed Officials have further validated that rates won’t be moving up soon. Currently, there are many challenges that confront the economy and lead to low-inflation rates. Some of the challenges that we face today are- disappointing retail sales, a slow down in the housing market, high levels of jobless claims, and worries about the European fiscal challenges. So, there are “two-sided” concerns about inflation. Bruce Kasman at J.P. Morgan Chase says that “Even with growth, high unemployment, and low inflation will keep the Fed sidelined.” After today’s meeting, the Fed committee communicated more uncertainty with rates to stay low over an extended period of time.

It’s traditional to rate a new administration at the conclusion of its first 100 days in office.

But the Obama administration might want to take a closer look at how they are faring with small business owners.

A new survey highlighted in an April 13 edition of Bizjournals found widespread displeasure with the president among small business owners.

Nearly 60 percent thought the president didn’t understand the needs of small firms and more than 40 percent were less optimistic about the national economy than before President Barack Obama took office, the survey said.

The Internet survey was conducted in March by City Business Journals Network and involved interviewing 301 CEOs and presidents of companies with five to 499 employees. Follow up phone interviews showed clear anger over the federal bailouts.

Pat Moore, owner of a private-duty health care firm in Kansas, worried about the specter of inflation, while others believed the large bailouts set a terrible precedent.

Several small business owners said even huge companies should be allowed to fail.

“If you didn’t run your business properly and you can’t survive, go away and let the strong survive, because that’s the way it’s always been, and that’s the way it should be,” Ronnie Nudelman, owner of a Buffalo printing company, told City Business Journals Network.

Not every review was negative.

One small business owner gave Obama credit for reaching out to small businesses to try to understand their needs, the report said.

Naturally, other concerns included loosening the credit market and that perennial small business woe — the high cost of health insurance.

The survey found that two-thirds of respondents were concerned that health care reform would mean higher costs for them.

How do you spell survival for a bent and battered U.S. auto industry?

According to an April 8 Associated Press story from the floor of the New York International Auto Show, the spoils might go to companies that dare to do something truly revolutionary.

“Chrysler LLC President Jim Press surprised reporters at the automaker’s news conference by arriving on stage in an iconic Fiat 500 subcompact. While the company’s big unveiling was a new Jeep Grand Cherokee, the attention was clearly on the small car Chrysler may bring to the U.S. if it completes its tie-up with Italy’s Fiat Group SpA. ‘Don’t you think that this would be a perfect car to get around New York City?’ he asked the crowd.”

But, as the AP reported, the bigger question remains whether Chrysler, living on a $4 billion government bailout, “will survive long enough to see the 500 on city streets.”

Offerings from other automakers trended toward the hip and green.

Mercedes-Benz debuted four new vehicles, including a high-performance version of its E-Class sedan and two hybrid models, and Land Rover unveiled a trio of new models, the wire service reported. Toyota’s Scion brand showcased a concept based on its iQ microcar, and Acura unveiled the ZDX, a sport sedan from Honda.

General Motors Corp. showed off the 2010 GMC Terrain compact crossover vehicle, but Troy Clarke, president of GM North America, nixed plans to speak with reporters at the show so he could stay in Detroit to focus on the company’s restructuring.

Only time will tell if new concepts and innovative selling techniques — including guarantees if a purchaser loses their job — will make a dent in the sluggish car-buying market.

The week before the show, the AP reported, automakers reported a 37 percent decline in March U.S. sales.