SBA 7(a) Weekly Lending Update

$11,927,247,000 in SBA 7(a) loans have been funded through the week ending August 27th. That is a $218,581,000 increase over the prior week.

Another $207,374,500 in SBA 7(a) loans sit in the Recovery Act loan queue.

The SBA and obambulate

obambulate
(o-BAM-byuh-layt)
To walk about.
From Latin ob- (towards, against) + ambulare (to walk).
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TIP OF THE WEEK
No obambulating in circles.
Small Business is getting bigger.

The SBA has indicated that they intend to make the alternative size standard PERMANENT for 7(a) loans. This alternative size standard had been set to expire on September 30th. This does not require a vote from the Senate or anything like that.

What is the alternative size standard? Under SBA's 504 program, a business concern must meet either the size eligibility criteria of the 7(a) program, or have tangible net worth not in excess of $8.5 million and average net income after Federal income taxes (excluding any carry-over losses) for the preceding two completed fiscal years not in excess of $3.0 million

As a result, businesses such as multi-unit franchisees usually too big for SBA financial assistance and manufacturers with more than 500 employees can utilize SBA 7(a) loans for real estate purchase, real estate debt refinance, business debt refinance, equipment, purchase, working capital and business acquisition.
_________________________________________
Indices:
PRIME RATE= 3.25%
SBA LIBOR Base Rate August 2010 = 3.30%
SBA Fixed Base Rate August 2010 = 5.67%
________________________________________________

504 Debenture Rate for August
The debenture rate is 3.52% but note rate is 3.57% and effective yield is only 4.93%.
________________________________________________
AHEAD OF THE YIELD CURVE

Do you remember the difference between a depression and a recession?

A recession is when your neighbor loses his job. A depression is when you lose your job.

With the housing market still obviously slumping, any job creation will have to come from small business.

This morning, the Intuit Small Business Employment Index reported that small business employment grew slightly in August, but at a declining rate compared to healthy gains made in January through April. The Index is based on figures from the country’s smallest businesses that use Intuit Online Payroll. The August employment growth translates to approximately 26,000 new jobs nationwide, the same number of jobs added in July based on revised estimates.

Keep your eye on Friday’s payroll report from the Department of Labor.

Here is a summary of payroll employment and this week’s interesting little table of data:

July (131,000)
June (221,000)
May 431,000
April 218,000
March 230,000
February (36,000)
January (26,000)
2009
December (150,000)
November (11,000)
October (111,000)
September (215,000)
August (201,000)
July (304,000)
June (443,000)
May (322,000)
April (504,000)
March (699,000)
February (651,000)
January (655,000)
2008
December (681,000)
November (597,000)
October (423,000)
September (403,000)
August (127,000)
July (67,000)
June (100,000)
May (47,000)
April (67,000)
March (88,000)
February- (83,000)
January- (76,000)

What does all this mean?

Overall employment fell 131,000 in July. The Census Bureau said it let go about 144,000 of the people conducting the decennial population count from mid-June to mid-July. It still had about 200,000 temporary workers on staff as of July 17, indicating additional cuts to come that will keep distorting the payroll figures for months. For that reason, economists say private payrolls will be a better gauge of the state of the labor market for much of 2010. Private payrolls that exclude government agencies rose by 71,000 last month, less than forecast, after a June gain of 31,000. Total employment fell a revised 221,000 in June.

The pace of hiring signals it will take years for the world’s largest economy to recover the more than 8 million jobs lost during the recession that began in December 2007.

As a result, interest rates will remain low for an extended period.
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OFF BASE
Happy Birthday Ted Williams.

Today is the birthday of Ted Williams. He would have been 92 years old.

In 1941, Williams was hitting .39955, which would round up to .400, on the last day of the season. Williams was offered a seat on the bench to protect the first .400 season since 1930 but in his typical Teddy Ballgame way, Williams declined. He then torched A's pitchers for six hits in eight at bats finishing the season at .406. No hitter has had a .400 batting average since. Despite that hitting, he was not the Most Valuable Player that season. He also led the league in runs, home runs, walks, on base percentage, and slugging yet lost the MVP to DiMaggio. DiMaggio that year had a 56 game hitting streak.
Both a .400 batting average and a 56 game hitting streak are records that will not be broken, at least not this season.

The real excitement left in the season is what happens with the Chicago White Sox.

For some reason, they seem to think that Manny Ramirez might help them out. The White Sox have lost nine of 14 and 13 of 20 to fall 4½ games back of AL Central-leading Minnesota with three games left in the season series between the teams. Interestingly enough, the first two stops on their 10-game trip are Cleveland and Boston, two of Ramirez's former clubs. Ramirez already has played at Boston this season. As a member of the Dodgers, he was 5-for-12 a home run over the Green Monster in a three-game series in June. As a member of the White Sox, Manny will now be playing in the best home run park in the game.

In addition to Manny, the White Sox also have the best new pitcher in the major leagues. That would be Chris Sale. A college baseball player just a few months ago, left hander Chris Sale became the first player from the 2010 draft to make it to the majors. In the eight innings he has now pitched over his first eight games, Sale has allowed only one run while striking out eleven. He is an incredible strike out pitcher. During his brief stay in the minors he struck out 15 in only 6 1/3 innings. He also led all of college baseball with 146 strikeouts.

It is also a brand new season for college football starting this weekend.

It will also be a brand new game.

There are three new college football rules in effect. Wedge blocking on kickoffs is banned. A wedge block is when two or more players form a wall of blockers to create a running lane for a return on kickoffs. The new rule defines a wedge as two or more players aligned shoulder to shoulder within 2 yards of each other. In addition, taunting in the field of play will start costing teams points in 2011. Currently, players who are penalized for taunting on their way to the end zone draw a 15-yard penalty on the extra point attempt, 2-point conversion attempt or the ensuing kickoff. Beginning in 2011, live-ball penalties will be assessed from the spot of the foul and eliminate the score. Examples include players finishing touchdown runs by high-stepping into the end zone or pointing the ball toward an opponent.

A third change bans the use of eye black containing symbols or messages, a trend that grew in popularity because of the use by Heisman Trophy winner Tim Tebow.

In what some are already calling the "Tim Tebow rule," college football players are now prohibited from writing anything on their eye black -- the very types of messages the former Florida Gator quarterback made popular with various Bible verses.

Tebow -- the 2007 Heisman Trophy winner popularized the trend, and the nation noticed. On the same day that Florida played Alabama in the SEC Championship Game December 5th, the No. 1 Google "hot" search in the U.S. was John 16:33, the verse Tebow wore on his eye black.

In fact, Tebow's Scripture choices were among the Top 10 Google searches in the U.S. during nearly every major Florida game in 2009. For the Sept. 19 game against Tennessee, his choice of Romans 8:28 was the No. 5 search; for the Oct. 10 game against LSU, 1 Thessalonians 5:18 was the No. 7 search; and for the game against Florida State -- his final home game -- Hebrews 12:1-2 was the No. 3 search. His choice of Ephesians 2:8-10 was the No. 4 search for the Jan. 1 Sugar Bowl. The Google trend dates back to the 2008 BCS Championship Game, when John 3:16 -- Tebow's verse for that game -- landed at the No. 1 spot.
______________________________________________

SBA 7(a) Weekly Lending Update

For the week ending August 20th, only $168,622,000 in SBA 7(a) loans were approved.

The drastic drop in volume can be attributed to the expiration of the 90 percent guarantee which expired at the end of May.

Legislation to end the increased guarantee through the end of the year will be voted on September 14th.

The SBA and ending the recession ONE LOAN AT A TIME

We have closed another loan.

This time it was a $2,000,000 SBA 7(a) loan to a car wash in the Inland Empire that refinanced a construction loan and some other debt.

In the last ten years we have closed $756,794,299 in SBA 7(a) and 504 1st trust deeds.

SBA 7(a) Rate Update

Indices:
PRIME RATE= 3.25%
SBA LIBOR Base Rate August 2010 = 3.30%
SBA Fixed Base Rate August 2010 = 5.67%
Rates can go up to 2.75% over these indices.

SBA 7(a) Weekly Lending Update- A picture is worth a thousand words

Since a picture is worth a thousand words, here is the weekly 7(a) lending volume. The cliff diving began when the SBA 7(a) loan 90 percent guarantee and SBA 7(a) loan guarantee fee waiver expired at the end of May.

SBA Loan Basics for Borrowers- Does an SBA loan need collateral?

SBA requires lenders to seek ALL available collateral. While a SBA loan should not be turned down due to a lack of collateral, lenders need to take as much collateral as they can.

Lenders first look to the business assets such as equipment. Inventory and accounts receivable are excluded.

If the business assets are not enough to secure the loan, the borrower may have to offer personal assets such as a second or third trust deed on the home. If the borrower has equity in excess of 25 percent of the market value of the home, SBA considers that to be worthwhile and will want the lender to use that if the business assets don't fully secure the loan.

A personal guarantee is required on all SBA borrowers.

SBA 7(a) Weekly Lending Update

Signs of life in 7(a) lending?

SBA 7(a) loans jumped by over $251,825,000 in the last week, bringing the total to $11,540,044,000 for the year.

This is the biggest one week increase since the expiration of the increased guarantee and guarantee fee waiver which occurred at the end of May.

Another 427 loans totaling $181,082,300 sit in the loan queue at SBA awaiting the possibility of funding with the guarantee fee waiver.

The SBA and quiescence

quiescence

(kwee-ES-uhns, kwi-)

A state of rest, inactivity, or quietness.

From Latin quiescere (to become quiet), from quies (quiet).


_____________________________________________________
TIP OF THE WEEK



The quiescence from the dog days of summer will soon fade into the crisp focus of autumn. The same thing will happen with SBA lending. On September 14th the Small Business Jobs bill will finally come up for a vote. Included in the bill will be provisions for a larger 7(a) loan program and 504 loan program. The 504 loan program will also have the ability to refinance debt for a few years. The increased guarantee and guarantee fee waiver for the 7(a) program will also be extended until the end of the year.

_________________________________________
Indices:
PRIME RATE= 3.25%
SBA LIBOR Base Rate August 2010 = 3.30%
SBA Fixed Base Rate August 2010 = 5.67%
________________________________________________

504 Debenture Rate for August
The debenture rate is 3.52% but note rate is 3.57% and effective yield is only 4.93%.
________________________________________________
AHEAD OF THE YIELD CURVE



The Federal Reserve Open Market Committee met last week and once again said that interest rates will remain low for an extended period.

The Fed also said after its policy meeting this week that it will reinvest principal payments on mortgage assets it holds into long-term Treasuries after judging that “the pace of economic recovery is likely to be more modest in the near term than had been anticipated.”

The central bank plans to buy about $18 billion of Treasuries and inflation-protected securities by the middle of September. The first purchases will be on August 17 for U.S. debt maturing from August 2014 to July 2016, according to the New York Fed’s website.

A few days later the Treasury Department sold $16 billion in 30-year bonds at a yield of 3.954%. Money managers and international investors were drawn to the government's sale of 30-year bonds despite yields coming at the lowest since March 2009. Investors offered to buy 2.77 times the amount of debt sold, compared to an average of 2.44 times at the last four new sales of 30-year bonds.

Here is what the 30 year bond has been doing:

2001- 5.49


2002- 5.43


2003- ND


2004- ND


2005- ND


2006- 4.91


2007- 4.84


2008- 4.18


2009- 3.89


2010- 4.77


What a minute, why no numbers for 2003, 2004, and 2005?

One month after the 9/11 attacks, the Treasury 30 year bond is discontinued. When the Treasury mothballed the 30-year bond in 2001, experts speculated it was trying to drive down long-term interest rates, which had remained stubbornly high while the Federal Reserve was slashing short-term interest rates to revive the economy. When the Treasury discontinued the 30-year bond in 2001, its yield fell 35 basis points in one day. Why? A shrinking supply of the 30-year Treasury bond caused increased demand to drive rates down.

What does all this mean?

About 72 percent of the U.S. government’s $862 billion economic stimulus program has been spent or obligated, according to President Barack Obama’s administration. Obama has increased the nation’s publicly traded debt to a record $8.18 trillion to fund his programs, leading some members of Congress to say the government should curb its spending.

The government appears to be borrowing prudently.

Last week’s sale of the 30 year bond was the same as the last three quarterly sales of new long bonds. While the government has steadily shrunk its auctions in most shorter term maturities, it has kept longer-dated debt sales larger to extend the overall maturity of its debt and thus reduce refinancing risk in coming years.

The 30 year yield has dropped from 4.77 percent at the last sale of the securities on April 8. The bond’s average yield was 4.49 percent from Dec. 31, 2007, through Sept. 12, 2008, just before the collapse of Lehman Brothers.

The bond market appears to be telegraphing no imminent rise in rates.
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OFF BASE
"“t ain't the heat; it's the humility."
-Yogi Berra
It’s the dog days of summer. Dog days? What is a dog day? Is it so hot that dogs just lay around panting? The term "dog days" has nothing to do with dogs. It dates back to Roman times, when it was believed that Sirius, the Dog Star, added its heat to that of the sun creating exceptionally high temperatures. The Romans called the period dies caniculares, or "days of the dog." The name Sirius seems to come from an ancient Greek word for "scorching" or "sparkling." Sirius is the brightest star visible from either of Earth's hemispheres. It's prominent in the evening during the northern hemisphere winter. But its appearance in the summer has also been noticed for many thousands of years. Each northern hemisphere summer, after being behind the sun for awhile, the Dog Star reappears before dawn. Early Greeks and Romans blamed Sirius for the heat in July and August. This is the time of year when Sirius comes up either with the sun or shortly before the sun each day. It travels across the sky with the sun during the daylight hours. The ancients believed that the double whammy of the sun and Sirius actually caused the hot weather.

I learned a new golf rule yesterday.

You can’t “ground” a club if you are in a bunker. What’s grounding? When setting up for a swing, many golfers will allow the club head to gently rest upon the ground with arms extended to enable the feet to be situated the proper distance from the ball. Also, you might take a divot during your practice swing. That also constitutes grounding. This is perfectly acceptable on the fairway, in the rough and off the tee. However, when playing a ball within the boundaries of a hazard, such as a sand trap the golfer is not permitted to allow the club head to touch the surface during address or any practice swings (Rule 13-4: 2 stroke penalty in medal play, loss of hole in match play). He or she may only strike the ground during the actual swing itself.

What is the motivation for this rule? Some claim that it permits the golfer to determine how thick or heavy the sand is, thus allowing a better feel for how hard the swing must be. But that doesn't really make sense because it is perfectly permissible for a golfer to slightly shuffle his/her feet at address to get a solid stance, and in the process, determine how heavy the sand is. More likely is the interpretation that to ground the club within a sand trap is to improve the lie of the ball. It is impossible to allow the club to touch the sand without depressing the sand, no matter how slightly. A sand trap affords an opportunity for a ball to become plugged. Were a golfer permitted to ground the club within a bunker, the ball would become more exposed, defeating the spirit of playing as it lies.

I figured that out yesterday. Professional Dustin Johnson had a one-stroke lead on the 18th hole of the PGA Championship at Whistling Straights. His tee shot landed in a flat area that had served as a path for spectators. It was sandy. But it did not strike him as being a formal hazard. In addressing the ball, Johnson grounded his club. Bad move. It cost him two strokes plus chance to tie and join the playoff.

SBA Loan Basics for Borrowers- What can a SBA loan be used for?

A SBA 7(a) loan can be used for many purposes such as real estate purchase, real estate debt refinance, business debt refinance, business acquisition, franchise financing, working capital and inventory purchase.

Perhaps the better question would be what can a SBA loan NOT be used for? You can NOT use SBA to pay off shareholder debt or buy into a partial ownership interest in a company.

SBA Loan Basics for Borrowers- What is a small business?

To be eligible for SBA financial assistance, which is a fancy way of saying to get a SBA loan, your company has to be considered a small business. Remember, SBA means SMALL BUSINESS Administration.

SBA uses what they call a size standard for both the SBA 504 and 7(a) loan program.

Currently the 504 loan program defines a small business as one which has net profit after taxes less than $3 million averaged over the last three years and a BUSINESS net worth less than $8.5 million.

The SBA 7(a) loan program currently uses the same standard as a 504 loan.

The SBA and the Fed

Today, the Federal Open Market Committee said that it will continue to keep interest rates “exceptionally” low for an "extended period."

The key language about rates stayed the same: "The Committee ... continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period."

EXCEPTIONALLY low interest rates for an EXTENDED period already exist with a 504 loan. Currently the effective yield on a 504 debenture is only 4.93% and this rate is fixed for twenty years.

On September 14th, the Small Business Lending Bill comes up for a vote in the Senate. Should the legislation pass, the exceptional benefits of 504 financing can be extended to refinance owner-user real estate debt.

For a copy of the Federal Reserve’s press release go here:
http://www.federalreserve.gov/newsevents/press/monetary/20100810a.htm

While the rate on a SBA 7(a) loan is typically variable and adjusts on a quarterly basis, it would appear that based upon the Fed statement today, rates are not going up any time soon.

The Fed has not raised the Fed Funds rate until unemployment drops significantly. Based on the the Fed's own forecasts of the unemployment rate and inflation, the Fed will probably not raise the Fed Funds rate until late 2011 at the earliest.

SBA 7(a) Weekly Lending Update

As of August 5, $11,289,219,000 in SBA 7(a) loans have funded. That is a $136,783,000 increase over the prior week.

SBA 7(a) Rate Update

Indices:
PRIME RATE= 3.25%
SBA LIBOR Base Rate August 2010 = 3.30%
SBA Fixed Base Rate August 2010 = 5.67%
A SBA 7(a) loan can go 2.75% above these indices.

The SBA and ending the recession one VOTE at a time

Still hope for the Small Business Jobs bill?

Just before adjourning late Thursday night, Senator Harry Reid filed a series of cloture motions to set up votes on the small business bill on Tuesday, Sept. 14. Reid withdrew all pending amendments, reoffered a substitute and moved to block any further amendments. More >

The SBA and ending the recession one employee at a time

Another 131,000 people lost their jobs in July according to the Department of Labor.

The Census Bureau said it let go about 144,000 of the people conducting the decennial population count from mid-June to mid-July. It still had about 200,000 temporary workers on staff as of July 17, indicating additional cuts to come that will keep distorting the payroll figures for months.

For that reason, economists say private payrolls will be a better gauge of the state of the labor market for much of 2010. Private payrolls that exclude government agencies rose by 71,000 last month, after a June gain of 31,000. Total employment fell a revised 221,000 in June.

According to Intuit, small businesses hired about 40,000 people last month. That means more jobs are being generating by small business than any other part of the economy.

That trend of small business hiring however has recently slowed. This slowdown coincides with the expiration of SBA loan Recovery ACT stimulus incentives such as an increased guarantee for lenders participating in the SBA 7(a) loan program. SBA 7(a) lending volume has also slowed since the expiration.

The SBA and ending the recession one VOTE at a time

The Senate heads toward its August recess without completing work on a small-business bill, despite ample floor time spent on the measure and wide bipartisan agreement on the details.

The bill (HR 5297), a priority of the White House, remains in limbo because of a continuing dispute over which amendments will be considered and partisan procedural wrangling over other issues.

The SBA and ending the recession one VOTE at a time

It does not look like the Senate will even get to the Small Business Jobs Creation bill today.

See here- http://www.congressmatters.com/story/2010/8/5/2423/-Today-in-Congress

Even if they do, it sounds like it would be filibustered to death.

See here- http://www.news-press.com/article/20100805/BUSINESS/8050354/1014/BUSINESS/Help-for-small-biz-on-hold

The SBA and ending the recession one VOTE at a time

It doesn't sound like anything is going to happen today with the Small Business Jobs bill. So no movement on SBA loans legislatively.

The Senate schedule will be consumed by the Supreme Court nomination of Kagen and legislation on funding for teachers. This legislation, known as HR 1585, make come up for a vote to invoke cloture.

Here is something interesting about cloture-

Senate rule XXII-
[I]f that question [cloture] shall be decided in the affirmative by three-fifths of the Senators duly chosen and sworn... then said measure, motion, or other matter pending before the Senate, or the unfinished business, shall be the unfinished business to the exclusion of all other business until disposed of.

That means that if they invoke cloture on the motion to to concur in the House amendment to the Senate amendment to H.R. 1586 (deep breath), then you can't start any other new business during any of the 30 post-cloture hours being used for debate. And that would include filing for cloture on the Kagan nomination or HR 5297, our Small Business Jobs Bill.

I got all this from here -

http://www.congressmatters.com/

SBA Loan Basics for Borrowers- What is the rate on a SBA loan?

So what is rate on a SBA 504 loan?

The 504 debenture effective yield is now down to only 4.93%. That is a rate fixed for 20 years.

What is a 504 debenture? It is a second trust deed through the SBA typically up to 40% of the purchase price of a building. A bank provides a first for 1/2 the purchase price and a borrower puts down only 10%

So what is effective yield? Is that the same as the interest rate? There are three different rates with a 504 loan-
•Debenture rate
•Note rate
•Effective yield

Debenture buyers are government and corporate bond investors who expect semi-annual payments (twice a year). Debenture rate is the yield to the buyer of that debenture. Borrowers however make monthly payments which is what the debenture note rate is to convert that monthly payment into a semi-annual payment. In addition to the interest that is paid there are on-going fees to keep the 504 program self funding. Those fees added to the note rate make up your effective yield.

This effective yield is now down to an all time low. Borrowers looking to acquire a building for their business (they must occupy at least 51% of it) should seriously consider the 504 program.

SBA Loan Basics for Borrowers- What is the rate on a SBA loan?

So what is rate on a SBA 7(a) loan?

The maximum rate a lender can charge on a SBA 7(a) loan is 2.75% over one of these three indices-
Prime
SBA LIBOR Base Rate
SBA Fixed Base Rate

The prime and LIBOR base rates are variable rates while the fixed base rate is fixed for the term of the loan.

Currently the indices are-

PRIME RATE= 3.25%
SBA LIBOR Base Rate July 2010 = 3.35%
SBA Fixed Base Rate July 2010 = 5.88%

If prime is the index, which is what most lender's use, your rate would be 6% (3.25% + 2.75%)

Here's the answer from the SBA: http://www.sba.gov/mostrequesteditems/CON_FAQ10.html

The SBA and ending the recession one VOTE at a time

The Senate still has not done anything about the Small Business Jobs Act. The Senate calender today will be filled with debate on Elena Kagen's nomination to the Supreme Court.

The Senate did however yesterday pass a resolution urging the Iranian government to release three young American hikers who have been detained in Iran for over a year. UC Berkeley graduates Sarah Shourd, Josh Fattal and Shane Bauer were taken into custody while hiking in in Iraq’s Kurdistan region. There was no mention of what will happen after Iran thumbs their nose at us.

SBA 7(a) Rate Update

Indices:
PRIME RATE= 3.25%
SBA LIBOR Base Rate July 2010 = 3.35%
SBA Fixed Base Rate July 2010 = 5.88%
A 7(a) loan can go 2.75% above these indices.
________________________________________________
504 Debenture Rate for JulyThe debenture rate is 3.80% but note rate is 3.86% and effective yield is only 5.213%.

SBA Loan Basics for Borrowers- What is the term of a SBA Loan?

The term of a SBA 7(a) loan is based upon the use of proceeds-

25 YEARS REAL ESTATE
25 YEARS REAL ESTATE DEBT REFINANCE
10 YEARS EQUIPMENT
10 YEARS WORKING CAPITAL
10 YEARS BUSINESS ACQUISITION
10 YEARS BUSINESS DEBT REFINANCE

The primary benefit of a SBA is that they are typically amortized over a longer period of time than a conventional SBA loan.

ALL SBA LOANS ARE FULLY AMORTIZED!

That means there is no balloon payment.

SBA 7(a) Weekly Lending Update

Through 7/31/2010, $11,152,436,000 in SBA 7(a) loans have been approved. This is only a $125,778,000 increase over the prior week. If annualized that works out to about a six and a half billion dollar annual pace. That well below the seven billion dollars lent out during the 2009 fiscal year.

What's going on? Lenders are waiting to see what happens with the extension of Recovery Act stimulus provisions such as the 90 percent guarantee and the guarantee fee waiver.

The SBA and ending the recession one employee at a time

This morning Intuit said small business employment grew slightly in July generating approximately 40,000 new jobs nationwide in July.

The Intuit Small Business Employment Index shows increasing employment since October 2009, reversing a downward trend that dates back to 2007.

For a complete copy of the report go here-

http://smallbusiness.intuit.com/blog/wp-content/uploads/intuitsmallbusinessemploymentindex_july2010.pdf

The SBA and fimicolous

fimicolous
(fy-MIK-uh-luhs, fuh-)
Living in or growing in animal excrement.
From Latin fimus (dung) + colere (to inhabit).
_____________________________________________________
TIP OF THE WEEK
The fimicolous propensity of Congress revealed itself as the Senate filibustered away HR 5297 the Small Business Lending Act. This bill would have extended the 90 percent guaranty on 7(a) loans as well as extended fee waivers along with an increased 7(a) and 504 program.


Using the filibuster to delay or block legislative action is a cherished tradition dating back to before the Civil War. The name for this tactic for pirating debate actually comes from a Dutch word meaning “pirate”.


In 1917, senators adopted a rule (Rule 22), at the urging of President Woodrow Wilson, that allowed the Senate to end a debate with a two-thirds majority vote, a device known as "cloture."


A successful cloture vote means the Senate would be limited to just 30 more hours of debate, which is a great topper to the 30 days they've already spent on it. It does not really matter since the House is already on summer vacation until after Labor Day.


What the politicians do agree on however is that Small Business will be the engine of job growth which is why this legislation is also referred to the Small Business Jobs Act.


Fimicolous is a wonderful adjective to describe what happens in Washington.
_________________________________________
Indices:
PRIME RATE= 3.25%
SBA LIBOR Base Rate July 2010 = 3.35%
SBA Fixed Base Rate July 2010 = 5.88%
________________________________________________
504 Debenture Rate for July
The debenture rate is 3.80% but note rate is 3.86% and effective yield is only 5.213%.
________________________________________________
AHEAD OF THE YIELD CURVE


It will be Small Business that will be the engine of job growth out of this recession.

This morning Intuit said small business employment grew slightly in July generating approximately 40,000 new jobs nationwide in July, a decrease from June’s revised estimate of 45,000 jobs. Since the growth trend began in October 2009, small business jobs have increased by 330,000. The Intuit Small Business Employment Index shows increasing employment since October 2009, reversing a downward trend that dates back to 2007.

The employment index reflects data from approximately 62,000 small business employers who use Intuit Online Payroll. These smallest employers are important to the economy as they comprise 87 percent of the total U.S. private employer base and employ nearly 20 million people.

Small Business accounted for almost all the jobs created in June. Payrolls had declined by 125,000 in June as the government cut 225,000 temporary workers conducting the 2010 census, Labor Department figures in Washington showed. Employment at all companies rose 83,000.

Keep your eye on Friday’s payroll report from the Department of Labor.
Here is a summary of payroll employment and this week’s interesting little table of data:

June (125,000)
May 431,000
April 218,000
March 230,000
February (36,000)
January (26,000)
2009
December (150,000)
November (11,000)
October (111,000)
September (215,000)
August (201,000)
July (304,000)
June (443,000)
May (322,000)
April (504,000)
March (699,000)
February (651,000)
January (655,000)
2008
December (681,000)
November (597,000)
October (423,000)
September (403,000)
August (127,000)
July (67,000)
June (100,000)
May (47,000)
April (67,000)
March (88,000)
February- (83,000)
January- (76,000)


What does all this mean?

The pace of hiring signals it will take years for the world’s largest economy to recover the more than 8 million jobs lost during the recession that began in December 2007.

Don’t be deceived by the jump in payrolls for May when they rose by 431,000 since it included a 411,000 jump in government hiring of temporary workers for the 2010 census.
All the new jobs are coming from small business. According to Intuit, 60,000 were added in February, when it seemed that an employment recovery was imminent. Additional hiring dropped steadily during the spring, to 40,000 in April and 32,000 in May. Another payroll company, Automatic Data Processing Inc., painted an even gloomier picture, saying that small businesses lost 1,000 jobs nationwide in June.

While correlation is not causation, the drop in small business hiring coincidences with the expiration of the SBA loan Recovery ACT stimulus measures.

Interest rates will stay low for, as the Federal Reserve likes to say, for an extended period.
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OFF BASE

Which would you rather have -- a million dollars, or Joe Oliver's head full of nickels?

That was the question Brett Boone once asked while playing for the Cincinnati Reds with teammate Joe Oliver. At the time, Joe had what was believed the biggest head in all of baseball.

The distinction now goes to Giants manager Bruce Bochy.

His cap size is 8 ¾ which is half a dozen sizes bigger than the average 7 3/8.

When he was finally called up to the majors in 1982, his bigger-than-normal hat size caused him trouble. After arriving in New York, he could not find a helmet to fit him and had to wait until his was rushed up from Tidewater before he could play.

Throughout his 14 years as a catcher in organized ball, Bochy wore the same batting and catching helmets. Both helmets were specially made in 1975, his first year in A ball with the Covington Astros. The batting lid was so huge that when he made a game-winning hit late in the '86 season, his Padres teammates celebrated by filling it with ice and a six-pack.

That large head of Bochy’s seems to be filled with knowing the rules of the game.

Last week Dodgers hitting coach Don Mattingly, who had to take over after Joe Torre had been thrown out of the game, went to the mound for a chat with Dodger reliever Jonathon Broxton. Mattingly took a few steps back off the dirt toward the dugout before turning around to answer a question from the Dodger first baseman.

Bochy and his pumpkin head came out to protest that Mattingly's about-face constituted a second trip to the mound. The umpires huddled and agreed, and Broxton had to leave the game. Broxton who had 19 saves and the week before had finished off the National League’s win in the All-Star Game, by rule was forced from the game with one out, the bases loaded and the Dodgers holding a one-run lead. Without their All Star pitcher the Dodgers gave it up and the Giants rallied to win, 7-5.

Rule 8.06 of the Official Baseball Rules stipulates a trip to the mound begins when a manager or coach crosses the foul line and ends when he leaves the 18-foot dirt circle surrounding the pitcher’s rubber. Returning to the dirt constitutes a second trip, at which point the pitcher must be removed.