Small Business Owners Predict Successes, Look for Funding this Year Posted by: Lisa Nichols | May 19,2008

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Small business owners are among the many people trying to stay successful during the recession through additional funding and expansion. Small and mid-sized company owners are banding together in states like Texas to push for legislative changes from a tax system that often proves costly to small businesses. Meanwhile, two new surveys help highlight small business’ desire to succeed through expansion and new funding streams. 

 

Survey Shows Small Business Owners Expect Successful Year End Results

 

Results from a new survey shows that small business owners are hopeful about their company successes this year. Administaff Inc. polled business owners and managers from more than 6,000 small and mid-sized businesses to learn more about their 2008 expectations. More than 75% of self employed owners and managers that responded said they think they will meet or exceed their goals for company success this year. And even with the recession, more than half of business owners surveyed said they wanted to reduce turnover of valued employees by providing them with raises or new responsibilities. 

 

Small Businesses Look for Funding to Stay Profitable

 

Small businesses need steady streams of funding to ensure success during the recession. Capital Access Network (CAN) recently surveyed 250 business owners to learn more about their funding needs. 81% of small businesses surveyed stated that a key tool for success is having a line of credit that they can count on for funding. The January 2008 CAN Small Business Barometer survey found that their own “credit crunch” worried small businesses more than any other impediment to business successes and profitability this year.   

 

Online Tools for Small Businesses Funding

 

Online small business tools can help companies with their funding woes. A small business credit card can provide an additional line of credit that can be used daily for new purchases. Many of the cards offer bonus rewards or cash back just for using the cards to buy regular office supplies and to pay for certain business expenses. The online tool to compare small business credit cards can help companies decide which cards are right for their unique funding needs. In addition to credit card reviews, using an online small business tool that outlines the pros and cons of credit cards can help companies decide which card to choose. 

Bank of America Has Problems with Home Equity Loans Posted by: Henry Baum | May 14,2008

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As goes Bank of America so goes the economy?  That’s a distinct possibility, as Bank of America is one of the largest banking institutions in the U.S.  This week it has released troubling figures via its home equity loans department.  Bank of America sees greater losses via home equity loans that were projected just three weeks earlier.  

Bank of America’s problems with home equity loans are similar to problems with the subprime mortgage industry.  Homeowners have found in recent months that they cannot handle the burden of  mortgage payments.  However, there is a significant difference between the home equity loan market and the subprime mortgage market. 

Subprime Loans and Home Equity

To be approved for a home equity loan, a homeowner must build up significant equity on a mortgage and then borrow of that dividend.  Though the term “home equity loan” does not sound risky, really this amounts to a second mortgage, as homeowners will have to pay off both the original mortgage and the home equity loan on top of that.  

One of the better ways to use a home equity loan is to put that money right back into home repairs or improvement, improving the value of the home.  Debt repayment is also highly popular and useful, as it can elevate a credit rating for refinancing, and improve savings.  

Subprime mortgages, on the other hand, are a brand new loan, normally with a lot of front-loaded interest.  They’re given to homeowners who may have very little experience paying off such a sizable loan.  Where the two mortgage markets are similar, however, is that banking institutions such as Bank of America got a little too overzealous with how many loans were approved.  The home equity loan boom is now proving to be a drain, as homeowners are finding it increasingly hard to pay off this additional loan during such a difficult economic climate. 

Home Equity and the Credit Crisis

Because of the weakening dollar and mounting debt, consumers are finding it hard to make ends meet.  It can be difficult enough to pay off one mortgage, let alone two separate major loans.  With home values on the decline, increased home equity is more difficult to acquire.  In the past, homeowners may have been able to bank on equity as a significant investment.  Once cashed out, it is becoming increasingly hard for homeowners to build that equity up again.  The result is Bank of America’s troubles: an increasing number of homeowners who are unable to pay off their home equity loans.  

This comes at a time when Bank of America and other banking institutions are already struggling because of the subprime mortgage crisis.  This is especially true for B of A in large states like California and Florida.  Defaults on credit cards are also posing a problem.  Though the credit crisis is projected to come to a close sometime in 2009, issues such as home equity loan delinquencies make the financial healing process that much more difficult.  

Can Twentysomethings Survive the Recession? Posted by: Lisa Nichols | May 14,2008

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Twentysomethings are working hard to secure their future, but surviving a recession wasn’t something anyone anticipated. Times are tough all around, but they’re especially difficult on the newest entrants to the workforce. Experts say that the recession will hang on until least next year, but can twentysomethings survive?

 

Credit Card Debt an Issue for Many Twentysomethings

 

Kids graduating from college often leave school with a significant amount of credit card debt. This debt is in addition to student loans, car loans and other lines of credit. It’s an overwhelming amount of credit debt for anyone to try and manage. For someone who never learned personal finance tips, it can seem overwhelming. Tips for managing credit card debt and dealing with personal finance are not on the curriculum in most secondary schools or in colleges. And trying to survive a recession, while already under a mountain of credit card debt, is a situation many twentysomethings never considered. The lack of preparation only compounds the problem- but there are steps you can take to help reduce the financial strain.

 

Personal Finance Tips: Manage Credit Debt and Survive the Recession  

 

Twentysomethings who are struggling with trying to manage too much high interest credit debt can get some relief from their personal financial concerns. Transferring high interest balances to a balance transfer credit card or a low interest rewards card can help reduce the overall amounts owed and the payments due every month. These cards are designed to help customers save money. If you’re not eligible for one of these cards due to your credit history, getting a prepaid credit card is also a viable way to improve your credit score. Find a credit card that reports personal financial information to the credit bureaus. Credit reports and scores are regularly updated, and positive payment reports on an account can help to quickly boost a credit score.

 

Surviving the recession won’t be easy for many people. But staying on top of credit card debt can help you move forward with plans for the future, like buying a house or starting a family. 

Boomers to Put Retirement On Hold Posted by: Lisa Nichols | May 13,2008

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Despite earlier reports indicating that many baby boomers plan to retire early, results from a recent survey conducted by the AARP would indicate otherwise. The results indicate that boomers are struggling with debt and residual effects of the recession, forcing them to delay retirement. The phone survey spoke with 1,002 adults 45 years of age or older.

 

Retirement Savings Plans Impacted by Recession

 

According to the phone survey done by the AARP, baby boomers’ retirement savings plans have been greatly impacted by the economic downturn. Four in 10 people surveyed indicated that they had provided financial assistance to a child. Eight percent of people surveyed said that they have given money to a parent. Inevitably, retirement savings plans have been greatly impacted by the efforts to help others in the family.

 

Boomers’ Retirement Planning Takes a Hit, Day to Day Expenses Also Reduced

 

Many baby boomers that were surveyed by the AARP stated that their retirement plans have been greatly affected by the recession- 27% of people 45 and older said they would put off retirement because of the economy. In addition to the changes to retirement savings plans, 14% of people surveyed said that they cut back on medications and six in 10 respondents stated they had to cut back on entertainment and dining out. Most of the boomers that participated said that they were finding it hard to pay for their basic needs expenses like utilities. One-third of all people included in the AARP retirement survey results have also stopped contributing money to their retirement savings plan.

 

Eliminate high interest debt to help ease debt worries and boost retirement savings plans. Moving high interest debt from loans and credit cards to a low interest credit card or a balance transfer card can help get debts paid down more quickly.