President Barack Obama urged Congress on Tuesday to pass his $30 billion package to boost small business lending by pumping capital into independent banks. The plan, proposed in February, is an effort by the administration to spur job growth.

The banks that receive the money would pay the government a dividend, which would decline as their lending to small businesses increased, said Reuters.The president has also pushed for a number of small business tax credits as part of his economic agenda.

In his remarks to Congress, Obama said passing the measures “shouldn’t be a partisan issue.”

The House of Representatives Financial Services Committee approved its version of a bill to boost small business lending by a 42-23 vote last week, with no Republican support, said Reuters. The bill will be brought before the full House for a vote soon, said Speaker Nancy Pelosi.

The country’s unemployment rate is stalled just under 10 percent, and the president and other Democrats need to counter criticism from Republicans that they haven’t done enough to fix the economy before mid-term elections in the fall.

The press and most of the public look at October 2008 as the beginning of the banking debacle and the unraveling of the health of the US Economy. Those of us in Business Acquisitions saw the difficulty some nine (9) to twelve (12) months before that. That’s when we – Business Brokers – saw our businesses slide; for us, it was either re-tool or die, from a financial perspective.

Throughout 2008, and to a large degree, to this very day, we (Business Brokers) have had no shortage of Buyers and Sellers. Our problem has been financing deals. We represented a Corporate Buyer on a $6 million acquisition, where the Buyer and Seller were both in agreement on all issues pertaining to the terms of the sale. It should have closed in August 2008; however, there never was any settlement and (believe it or not,) the deal is still pending.

Along the way, the frenzied demand for cash created a huge and sleazy industry that thrived on false hope and scams by fly-by-night loan brokers, who demanded high fees just to initiate a loan process. Many of the fakes in the group came right out of Wall Street and never produced a cent of loan money. (We used to joke that those people were in the business of selling applications, not finding loans.) And we are not talking about Small Businesses being the sole victims of these scammers; we are talking about acquisitions of $5 million to $15 million, with legal representatives and accountants that one would think would be able to uncover such con artists, before the Buyers get hurt. But just like what happened with Bernie Madoff, many of the victims were given these names with assurances from other Wall Street people…and who would question recommendations from Wall Street?

To date, it has been suggested that as many as 65% of US banks are not lending to Small Businesses. Not for lines of credit. Not for business acquisitions. Not for funding inventory.

The SBA (Small Business Administration) is beginning to loosen its stranglehold on its own activity. (For those who do not know, the SBA does not directly lend money; it guarantees funding for loans that are made to Small Businesses by banks. Banks take no risk! If the SBA programs dry up – as they have in the past two years – there would be NO lending to Small Businesses!) But for the past eighteen months or so, the vast majority of SBA activity has involved loans to current Small Business Owners for the sole purpose of purchasing Real Estate in which to house their own, current operations. The reasoning is that, whether it is a good or bad time for Real Estate, if the business goes under, the SBA has the property as a tangible asset to foreclose, and it can recapture at least some of the money it loaned. This is not possible when lending for the purchase of a Restaurant that is located in leased space. There are no assets to reclaim, unless the SBA and the Bank go after the business Owner, personally. And with so many people possessing no equity in their homes, there is not much for the lender to attach.

The key to a quick, full economic recovery, may well lie with the SBA, according to almost any economist that can be found. In the recession of the 1980s, many corporate giants laid off entire tiers of middle management, in streamlining and cost savings measures. The SBA was extremely active at the time, and loaned an incredible amount of money to these, very capable people, who then began to build or buy their own businesses, employing lots of people along the way. This, those economists insist, is the way the recession was overcome.

But now, the Bush Administration, and later the Obama Administration has concentrated on GM, AIG and the like, feeling that the survival of corporate behemoths is the way to rebuild America’s financial strength. Unfortunately, the first things companies like these do is to lay off employees. Who is going to hire these people, at this point in the economic cycle? Is it no wonder why unemployment remains horrendously high? And with the SBA seemingly paralyzed, there is no way to replicate the strategic comeback of the 1980s.

So, what is the Small Business Owner, or Buyer to do? For the most part, there are three (3) ways to go:

1. Family and friends. If they can invest in you, it is the preferable means of securing funding; but how much can you get through sources like that? Dealing with friends and family in such a fashion can lead to incredible stress, friction, arguments and long lasting hard feelings, even if you are ultimately successful. As tough as banks can be, at least they are lacking in emotionalism that family and friends have, and share with you, in abundance!

2. Private funding, “angel investors” and similar sources. But these are “needle in a haystack” ways of obtaining resources, and many times, they are extraordinarily expensive. Many businesses have started up with such mammoth debt that they can never recover, no matter how successful the business, on a day-to-day basis.

3. The best way is through the development of a relationship with a responsible Loan Brokerage system. Unlike the con artists cited earlier, there are Brokerages that have longstanding relationships with those Banks that are still lending, and have histories of success that can be tracked and referenced. They know what lenders will accept applications for which type of business, what the Buyer needs to qualify, and how to “package” the application for maximum result. It is a combination of successful networking, keen knowledge that has been gained over time, and artistry in presentation.

In some circumstances, you need to employ a combination of all three of these tactics. However, it is crucial to understand that there truly is light at the end of the tunnel, and it is not a train coming right at you! It is not as easy as it was prior to 2008. But if you have a sound business opportunity, and a well written Business Plan, you can make it happen. Don’t give up the dream!

New data from payroll companies suggests that small businesses are slowly beginning to add employees, even as the most recent Labor Department report shows the unemployment rate held steady at just under 10 percent. Some economists believe these numbers indicate the recession is bottoming out.

Based on data gathered from Intuit’s online payroll service, companies with less than 20 employees have added jobs since June 2009, said Business Week Additionally, data from SurePayroll shows the average paycheck for workers at businesses with fewer than 100 employees has stabilized, said Business Week.

President Obama has put forth a number of measures intended to get people back to work, including tax incentives for businesses that hire new employees and pushing banks to free up more credit for small businesses.

John Bishop, a labor economist at Cornell University, told Business Week that temporary incentives like tax credits could create more than 2 million jobs in a year.
“It potentially has a huge effect, and small business would be the primary beneficiary of that,” Bishop told Business Week.

Omaha, Neb., home to Warren Buffett’s Berkshire Hathaway company, has weathered the recession better than any other city in the nation, according to Forbes magazine.

So what’s this Midwestern city’s winning formula? Forbes said Omaha had a 1.3 percent gross metropolitan product growth rate in the last year, a low foreclosure rate and a 5 percent unemployment rate – half of the national rate of 10 percent.

Omaha also has a strong agricultural sector and growing biofuels industry, and it is home to 30 insurance companies and regional banks like Mutual of Omaha.

Forbes ranked the rate of economic recovery of the 100 largest Metropolitan Statistical Areas based on five categories: unemployment rate, GMP (a measure of the size of a city’s economy), foreclosures, home prices and sales rates. Overall, cities that are on the road to recovery have diversified industry and a relatively stable housing base.

Rounding out the top 10 are San Antonio, Texas; Austin, Texas; Pittsburgh, Pa.; Harrisburg, Pa.; Dallas-Fort Worth, Texas; Rochester, N.Y.; Houston, Texas; and Raleigh, N.C.

Click here to see the full list.

The U.S. unemployment rate hit 10.2 percent in October — a 26-year high, according to recent figures from the Labor Department.

The country shed 190,000 jobs in September, even as other economic indicators have pointed to a recovery from the recession. President Barack Obama on Friday signed a bill that would extend unemployment benefits up to an additional 20 weeks and extend the first-time homebuyer tax credit.

Republican critics of the Obama administration are pointing to the double-digit unemployment rate as proof that the $787 billion stimulus package is failing; meanwhile, labor unions and some Democrats are calling for more spending to create jobs, according to the New York Times.

The highest level of unemployment came at the end of 1982, when it hit 10.8 percent, reported the Times.

A Commerce Department report released Thursday that showed growth in the gross domestic product sent the stock market soaring, with the Dow Jones posting a nearly 200 point gain.

At the end of trading on Friday, however, that gain was erased by another Commerce Depart report that said consumer spending dropped in September by the largest amount in nine months, according to the the New York Times.

The Dow Jones dropped nearly 250 points, or 2.5 percent.

The U.S. economy expanded by 3.5 percent between July and September, and household purchases rose 3.4 percent, according to the Thursday Commerce Department figures.

Much of the growth was attributable to government incentives such as the “cash-for-clunkers” program which spurred consumer spending on automobiles and an $8,000 tax credit for first-time homebuyers.

Purchases of durable goods, including autos, jumped 22 percent, and residential construction rose 23 percent in the last quarter, reported Bloomberg News.

That trend was reversed when the cash-for-clunkers program ended in September, said the New York Times.

Unemployment figures also remain dismal, leading President Obama to say the economy has “a long way to go” before it makes a full recovery.

The jobless rate reached a 26-year high of 9.8 percent in September, up from 7.6 percent when Obama took office in January, Bloomberg reported. Many economists predict the unemployment rate will top 10 percent in 2010.

Many small business owners and trade groups that typically oppose minimum wage hikes were relatively quiet when the most recent increase took effect July 24, raising the national minimum wage to $7.25 an hour from $6.65 an hour.

Small businesses complain that mandatory wage hikes hurt their bottom lines, forcing them to raise prices or impose cost-cutting measures, including layoffs. But the National Federation of Independent Business said that most businesses pay more than minimum wage to attract the best workers, and 21 states already have minimum wage requirements above the federal level, according to MSNBC.com.

While economists believe the wage hike will have little effect on the economy overall, teens and young adults, as well as workers in rural or poor areas, will likely suffer the most when employers make hiring decisions, said MSNBC.com.

Phyllis Knueven, who owns a grocery store in Illinois that employs several teens, told MSNBC.com she could hire more experienced and flexible adult workers for $8 an hour.

Teens and young adults have already been hit hard by the recession; the June unemployment rate was 24 percent for 16- to 19-year-olds and 15.2 percent for 20- to 24-year-olds.

With more Mexican workers in the United States unable to find jobs, their families back in Mexico are struggling to survive. Millions of Mexicans rely on the money sent home by relatives working in the U.S.

The Bank of Mexico reported that money transfers from the U.S. to Mexico dropped 20 percent in May, to $1.9 billion, compared to last year, according to an article in USA Today.

An estimated 12 million Mexicans work illegally in the U.S. and have suffered more unemployment than the population at large, according to the Pew Hispanic Center.

Jack Martin, an immigration-control advocate, told USA Today that less money going to Mexico might mean more money staying in the U.S. to stimulate the economy.

In Mexico, small, rural towns known as pueblos fantasmas, or “ghost towns” because so many men have left to work in the U.S., have been hit especially hard, said USA Today.

For the mainly women, children and elderly left behind in those small towns, the suffering is very real.

“Thank God, we haven’t had anyone die of hunger yet,” Jesus Tello, 63, a farmer in the isolated town of Pacula, told USA Today. “But things are getting harder and harder. People are living on beans.”

A rise in home sales is fueling optimism that the country is clawing its way back from the recession.

Sales of previously owned homes rose 2.9 percent in April, bringing annual sales to 4.68 million, a report from the National Association of Realtors said.

But the good news was tempered by a separate report that said that as mortgage costs rose, applications for home loans fell to their lowest level since early March, according to LiveMint.com.

The number of unsold homes also rose 8.8 percent, but analysts chalked up the rise in inventory to the beginning of the busy spring buying season, said LiveMint.com.

Economists see the general economic outlook brightening with job losses and unemployment claims dropping and consumer confidence on the rise.

When it comes to boosting budding entrepreneurs, look no further than the Tar Heel State.
According to a Feb. 13 report by bizjournals, North Carolina is home to two markets with the nation’s top ranking for “small-business vitality.” And by top, they mean the very top — Raleigh is No. 1 in the national rankings and Charlotte is No. 2. Bizjournals said it used a six-part formula to analyze the nation’s 100 largest metropolitan areas, searching for the places that are most conducive to the creation and development of small businesses.

Here’s why North Carolina is a leader even in tough economic times, according to bizjournals:

• Population: Raleigh and Charlotte together gained 427,000 new residents between 2002 and 2007. Raleigh grew by 21.2% in that five-year period, Charlotte by 17.4%. Both dwarfed the national growth rate of 4.8%.
• Employment: The two regions are cushioned from the recession by outstanding job growth during the 2003-08 span
• 23.0% in Raleigh, 15.4% in Charlotte. The U.S. gain was 5.8%.
• Small-business growth: The number of small businesses grew dramatically in both markets from 2005 to 2006, the latest period covered by official statistics. Raleigh posted a 4.6% rise, Charlotte 4.0%. The national increase was 1.3%.
• Small-business concentration: The typical U.S. market has 24.57 small businesses for every 1,000 residents. Raleigh was listed at 27.58 per 1,000, Charlotte at 27.07. Third in the “Top Five” ranking was Seattle, followed by Austin and Boise, Idaho. Detroit was last, battered by the decline of the automotive industry and high unemployment.

To see a slideshow on the Top Ten click here.