May 2010 Archives

May 14, 2010

CDFIs--An Alternative Loan Source for Small Businesses

Unable to secure a traditional bank loan for your small business? You might want to check out your local Community Development Financial Institution ("CDFI"). CDFIs are government-designated lenders--usually small banks, credit unions, nonprofits, and others--whose mission is to promote community development. In return for access to funding sources like grants and Treasury and SBA financing, they agree to make at least 60% of their loans to low income borrowers.

As reported in a Wall Street Journal article by Emily Maltby, most of their loans have gone to start-ups and struggling businesses that wouldn't qualify for a traditional bank loan because they are considered too risky. In fact many CDFIs only work with businesses and individuals that cannot get a traditional loan. In making loans, CDFIs don't focus on a borrower's credit history. "We look at character, willingness to do the work of the business and willingness to repay the loan," says Mary Mathews, president and chief executive of a nonprofit CDFI.

You'll need to find the CDFI in your area that is the right fit for your business. Each CDFI serves a certain region and they all have their own loan criteria. You can find a complete list of CDFIs on the Treasury's website.

For a comprehensive guide to all aspects of running a small business, see Legal Guide for Starting & Running a Small Business, by Fred Steingold (Nolo).

May 3, 2010

IRS Open House for Small Business Tax Help

On Saturday, May 15th, the IRS will host a nationwide Open House for small businesses who need help with tax problems or tax forms. There will be 200 IRS offices, at least one in every state, open to the public from 9 am to 2 pm local time. IRS staff will be there in person or by telephone to help with small business tax problems, including notices and payments, return preparation, audits, and a variety of other issues. So, for example, if your business owes taxes you can't pay, you could discuss your options--such as an installment agreement or offer in compromise--with an IRS professional. Depending on what you decide, you could get help completing the paperwork and leave with your problem resolved. Or, if you're having trouble completing an IRS form or schedule, you can work directly with IRS staff to get the job done. At a previous IRS Open House this spring, 88 percent of the taxpayers who went for help had their issues resolved the same day. Here is the link for the Open House locations. Two more are planned for Saturday, June 5th and Saturday, June 26th.