Big Banks Cut Back on Loans to Small Business.
In fact, forget the shopping malls with traffic and parking hassles, America’s small business owners want you to “Shop Small” during this Christmas season. “We work very hard at what we do, and when you support small businesses, you’re supporting a family-owned business like ourselves to grow and succeed,” says Mindy Moran, co-owner of Jonathan Moran Woodworks in the Strip District. “I think it’s a wonderful promotion, and we have found the people listen and do participate, so we’re really looking forward to Small Business Saturday this year,” says Brian Coyne, owner of Backstage Alpaca Pittsburgh in the Strip. “You’ll look around here, and pretty much everybody here is an independent entrepreneur,” Westerfield told KDKA money editor Jon Delano on Friday. “It’s sort of what America is built on — the entrepreneur, someone coming up with an idea and going for it and creating a great product or service for the community,” says Dougherty. I’d rather give my money to the mom-and-pop shops and indie startups and bypass the big box store drama and fight-to-the-death frenzy that have become holiday shopping.
Only by clearly understanding and appreciating the changing face of small business in America can we enact meaningful reforms that will help them prosper.The biggest banks in the U.S. are making far fewer loans to small businesses than they did a decade ago, ceding market share to alternative lenders that charge significantly higher rates. Together, 10 of the largest banks issuing small loans to business lent $44.7 billion in 2014, down 38% from a peak of $72.5 billion in 2006, according to an analysis of the banks’ federal regulatory filings.
Our goal is to remind our fellow citizens that by shopping small this holiday weekend, they are fueling the engine of American job creation and innovation. And it’s oh-so satisfying to stroll through your hometown, visiting the merchants and enjoying all of the perks that the small-biz owners go out of their way to spoil you and your family with! These firms have been consistently responsible for 60 to 80 percent of net new jobs in each year of the past decade, making them one of the few bright spots in a volatile period in recent economic history.
So here, then, are some of my favorite local stores — not just for the terrific things they sell, but for the extras they put into the shopping experience. It was Westside Storey’s Chris Harrington who introduced me to Jennifer Janesko’s KS/MO necklace ($75) with interlocking charms in the shape of both states.
I spend a lot of my time in Wellesley, where my own clothing boutique, Gretta Luxe (grettaluxe.com), is in the town’s pretty downtown shopping area. These job creators have consistently told me that burdensome regulation along with high taxes and fees represent the two biggest barriers to their success. It’s a true pleasure during the holiday season to walk around Central Street — to such stores as Wellesley Toy Shop (57 Central St., wellesley toyshop.com). Two examples of this reality can be found in legislation I introduced this year – H.R. 527, the Small Business Regulatory Flexibility Improvements Act and H.R. 2499, the Veterans Entrepreneurship Act. There, owner Andy Brown always gives me guidance on the best new ‘It’ toys, buzzed-about books, and he gift-wraps all my kids gifts for simple store pickup.
Monday, while picking up some Zum & Be Merry candles at Indigo Wild in midtown, I was talking to Leslie McGuire, the company’s self-described “marketing chick.” She put me on to her favorite place to gift shop: Bijin Spa in Prairie Village. “On top of the spa services, there is a huge retail shop with cool jewelry, mittens, nail polishes and funky and cool gifts you might not see anywhere else,” she says. H.R. 527 requires federal agencies to assess the impact of the rules and regulations they propose on small business and consider less burdensome alternatives.
Just a few steps away is Wasiks (61 Central St., wasiks.com), the curated cheese shop that offers delicious free samples and has an awesome wine bar with free wine tastings while you wait. They have a Holiday crate, but I’m checking out the new For Him crate ($68, shipped) featuring Sock 101, Jack Black shave lather, Dave’s coffee and Liddabit Sweets Bourbon Bacon Caramel Corn Popcorn. One-size-fits-all mandates handed down from DC bureaucrats in granite office buildings are no longer compatible with the complexity and diversity of the challenges faced by today’s small businesses. Outside of Wellesley, other quintessential New England shops like Phillips Candy House (818 Morrissey Blvd., Dorchester, phillipschocolate.com) are also a must.
Step into the original store and sample some of their signature chocolate brownies, almond buttercrunch and the chocolate turtles that they’re famous for. Small Pleasures also offers custom design, so with enough time and a little creativity, you can be completely sure you’re giving a gift that’s as personal as they come.
And for foodies on your gift list, the practically brand-new Boston Public Market (100 Hanover St. at Haymarket Station) features over 38 vendors of coffee, pastas, handmade bowls, nuts and much, much more. Many big companies are locking in low-cost, long-term financing or borrowing to fund mergers, said John Elmore, vice chairman of consumer and small business banking at U.S.
Christina Eldridge is all about the gifts that do good as founder of Red Dirt Shop, an accessories company that raises money to provide clean water in impoverished areas. USB 0.30 % Small-business owners, by contrast, “are just more cautious or don’t have the degree of confidence to go full in,” he said, despite good financial performance.
Christina says her favorite Kansas City small business buys are online, such as the Acts of Good Journal (actsofgood.com). “The journal was conceived, designed and self-published by KC do-gooder Adam Benton,” she says. “He lives a life of faith and gratitude, and this journal helps others do the same. So if you want to show gratitude for someone, you do an act of good for them, write down why and then give that person the journal. “Then it’s their turn to do for someone else when a time arises, and pass the journal on again.
Many banks, in fact, are less interested in small business lending because it isn’t as profitable as loans that more easily fit into standardized approval and repayment processes—such as credit cards and mortgages—and can be packaged into securities for sale to investors, according to Federal Reserve Bank of Cleveland senior policy analyst Ann Marie Wiersch. He has since refinanced those high-cost loans and secured additional funding to expand from Opportunity Fund, a nonprofit lender, that had an annual rate of 12.3%, the lender said. She likes to give the gift of beauty, especially at Milagro Midwestern Spa in downtown Overland Park. “They have the most unique assortment of products, from handmade lotions and stuff to really fun cards and art prints.” Her gift pick: anything from Milagro’s Maker Counter, where you can get custom-made skin care, like the beard oil Crystal gifted last Christmas. Breines said: “It’s not like the olden days where I could borrow $100,000 on a handshake…based on what the banker knew about me personally, my business and prior experience.” Lending by banks is concentrated among firms that are at least 10 years old, according to a PayNet analysis. “It’s the early stage companies that are getting hit hardest by the credit gap,” PayNet President William Phelan said. Characters we’ve seen on buildings around the city are on prints, mugs ($15) and toys now. (I’m about the Party Walrus, $30.) They often shop at the Oracle in the Crossroads, which features framed insects, interesting taxidermy and all sorts of eccentricities.
Wells Fargo said it extended roughly $50.9 million in loans, investments and grants to nonprofits that support small business economic development in 2014. Catch Scribe, Alisa and other local artists at the MADE — Kansas City Artist Market pop-up shop Dec. 11-12 at Counter Point Event Space, 1903 Wyandotte St. (facebook.com/madeartkc) Brooks Proctor owns Square Bear streetwear with Asheley Nicole. BAC 0.23 % began offering lines of credit of $10,000 to $100,000 this summer using a less expensive underwriting process that includes a review of checking and merchant payment processing accounts, instead of checking years of tax returns and financial statements. Before the new program, “if you wanted $10,000, $15,000 or $20,000 in credit, the option we would give you would be a credit card,” said Bank of America Small Business Executive Robb Hilson. “If someone wants to buy a forklift, it doesn’t make sense to put it on a credit card.”
Brooks’ favorite boutique has long been Standard Style on the Plaza and in Leawood, owned by KC’s favorite fashion couple, Emily and Matt Baldwin. “It’s classic.