Gas prices this past Labor Day weekend dropped to its lowest point in more than a decade, as domestic oil production continues to flourish and there’s no sign of this slowing. This is great news for small business owners as the added disposable income is essentially “found money” for most people since prices were not expected to plunge so low.
However, as the winter months quickly approach, it may create a seasonal cash crunch for many small business owners such as landscaping and construction companies. Read Rohit’s Inc. column on how to avoid cash issues as the business hot season cools down.
Meanwhile, legislation to approve a higher percentage of loans for cash-strapped business at credit unions is long overdue as Rand Paul (R-KY) and Sheldon Whitehouse (D-RI) have introduced the Small Business Lending Enhancement Act into the U.S. Senate. The legislation would increase the credit union member business-lending (MBL) cap for credit unions from 12.25% of assets to 27.5%, effectively allowing credit unions to grant more loans. Read Rohit’s Forbes column on the impact of raising the credit union lending cap.
Forbes: Latino-Owned Business Their Finances and Impact On Economic Growth
Small business loan applications submitted by Latino entrepreneurs grew 18% in the past year, Latino business owners face significant hurdles in securing financing. A study released this month by Biz2Credit on financial performance of Latino-owned businesses found that average annual revenues, credit scores and business tenure was lower. While it is a positive sign that increasing numbers of Latino-owned businesses are seeking funding, they still need to catch up in many areas. Read more.
The SBA’s temporary shutdown in July had a negative impact on small business borrowing, according to the Biz2Credit Small Business Lending Index, which saw lending approval rates at banks and credit unions drop. In turn, institutional lenders and alternative lenders picked up the slack in borrowing requests.
The Federal Reserve did not increase the interest rates after a two-day meeting of its policy-making committee and this bodes well for the outlook of small business owners.
Rohit Arora and Ramit Arora
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