Near the end of September 2010, President Barack Obama signed a Small Business Bill into effect. The new bill set aside $30 billion for small business lending. The law also includes $12 billion in tax breaks for small companies. This bill was signed into effect as a response to the 9.6 unemployment dissent in America. President Obama and the administration signed the bill to demonstrate an effort to decrease the unemployment levels in the United States. President Obama hopes that the loan will create as many as 500,000 new jobs within the next couple of years.Small Business Jobs Act 2010 ChangesThe Small Business Jobs Act includes the Recovery Act Loans Extension that provides $14 billion in lending support. Small Business Administration (SBA) Recovery loans will be extended under the law with a 90% guarantee and reduced fees. At the time that the bill was signed, 1,400 small businesses were waiting for funding. Since the signing of the Recovery Act, 70,000 Recovery loans have been supported. Over $680 million dollars have created $30 billion in lending support.The bill supports higher loan limits, and the maximum loan sizes increased in the pre-established loan programs. The new bill also increases the 7(a) and 504 loan limits from $2 million to $5 million. Manufacturers may receive up to $5.5 million. The 7(a) loan program is one of the most flexible loan programs offered for start ups and existing small businesses. Most of these loans are gained through commercial lending institutions. The 7(a) loan program includes an Export Loan program and a Rural Lender Advantage program. Some businesses will be able to refinance and incorporate their commercial real estate mortgages into the 504 loan program. However, this only applies to owner occupied units.Microloan limits increased from $35,000 to $50,000. These loans are designed to help entrepreneurs with large start-up companies and small businesses owners in underserved communities. The new bill also increases small business eligibility for SBA loans. They make this possible by increasing the “alternate size standard” to small businesses with less than $15 million in net worth. This also applies to those businesses with less than $5 million in average net income. The law also increases the amount of Small Business Administration (SBA) Express loans from $350,000 to $1 million. Working Capital and Commercial Real Estate Refinancing received temporary enhancements to assist small business owners.Tax CutsThe tax cuts include the following:- More Deductions for Start Ups
- Deductions for Cell Phones provided by the Employer
- Self Employed Health Insurance Deductions
- Penalty limitations for small business tax reporting errors
- Accelerated or Bonus Depreciation
- Provisions for up to Five Years of Net Operating Losses
- Up to $500,000 for Small Business Expenses: The Highest Expense EverFees Associated with the SBA LoansFees are assessed to offset the costs of the SBA loan to the taxpayer. Lenders are charged a guaranty fee and servicing fee for each approved loan loan. The fees are a percentage of the amount loaned to the borrower. The lender may charge the guaranty fee upfront. However, the borrower is not responsible for the lender’s annual fee.ARC LoansARC Loans are small business loans that do not carry any associated fees. In the past, the fees for loans were between 1% and 3.5% of the total cost of the loan. ARC loans offer 100% guaranty from the SBA to the lender. No fees are required to be paid to SBA. Many of these loans are provided over a six month period. The repayment of the principal of the loan may be deferred for 12 months after the final disbursement of the loan. Repayment may last as long as five years. The best candidates for this type of loan are companies that have been profitable in the past, but are currently struggling. These companies may have begun to miss payments recently because of financial hardship. These funds may be used to make payroll, buy inventory or improve core operations.7(a) LoansLenders will be charged an annual fee of 0.55 percent of the guaranteed portion of 7(a) loan. The fee will only be assessed to the balance of the loan and not the entire loan amount.504 LoansBorrowers will pay an annual fee of 0.749 percent on the outstanding balance of the 504 loan. This amount increased from 0.389 percent. Loan interest rates may not exceed 4.75% and may be as little as 2.25% when negotiated through a bank.How Long is the SBA Loan Process?Since the Small Business Administration is a guarantor and not a lender, the amount of time required to approve the loan will vary. The Small Business Administration attempts to reach its decision within seven to 21 business days from the receipt of the application. To accelerate the process, applicants should have several components of their application in place.The length of time it takes for the SBA to respond to the application depends on the loan program your business elects to apply to. A business plan with financial statements is required for all loan programs. Earnings projections and collateral offerings must be established. In general, the SBA microloan is the least time consuming application and will be approved the fastest. The maximum loan amount was increased to $50,000. The funds cannot be used to buy property or pay debt.Top Five SBA Loan LendersThe banks have sorted SBA lending by region. Some of the most prominent banks involved in lending are the following:Wells Fargo BankWells Fargo managed a No. 1 ranking between October 1, 2009 and September 30, 2010 for the Small Business Administration 7(a) loan. The bank issued 91 SBA loans with a total value of $31.9 million. The bank was the second leader in terms of ARC loans. The bank issued 23 loans for a combined value $710,100.JPMorgan Chase BankChase Bank issued 33 ARC loans with a total value of $935,100. They ranked No. 1 in this category of loans issued.Mortgage Capital Development CorporationThis particular bank issued the most 504 SBA loans. Businesses may use these loans for real estate purchases, property constructions and upgrades.TMC DevelopmentThis bank issued 71 SBA loans for a combined value of $54.1 million. Nearly, 56 of these loans were 504 loans. The loans had a total combined value of $48.9 million.Capital Access GroupCapital Access Group issued 51, 504 loans for combined value of $37 million.Rates of Top Five SBA Loan LendersWells FargoTypically, 3.5% of the SBA amount is due at the time of the loan. However, the fee may be financed. An origination fee may include bank fees. A fixed or variable interest rate will be negotiated by the bank for the Wells Fargo portion of the loan.Chase BankA guaranty fee of 1% to 3.5% of the guaranteed amount must be paid by the lenders. The lender must also pay the annual fees of 0.25%. The lender may pass the guaranty fees onto the lender, but not the annual fees.Mortgage Capital Development CorporationThis bank charges 0.389% of the balance of the loan for fees.TMC DevelopmentMost 504 loan programs will pay up to 90%. Therefore, most borrowers only have to make a 10% down payment. This bank offers a 4.39% interest rate to those seeking a loan. The fees are typically 1% or less.Capital Access GroupBusinesses may get up to 90% financing with a SBA loan. The interest rates are 4.40%. The fees are typically 1% or less.Copyright (c) 2010 Trey Markel
SBA Loans and the New Small Business Bill
Technology Transfer Case Study – Pathfinders for Independent Living, Inc.
Pathfinders for Independent Living, Inc., a nonprofit organization, was founded after the passing of the Americans with Disabilities Act (ADA.) Pathfinders provides information and assistance to elderly and disabled individuals and their caregivers on how to live as independently as possible. Its core value is to Promote Self-Reliance. The culture within Pathfinders is one of friendly support. Pathfinders’ IT leadership proposed a project to design and build a network infrastructure that would provide security for sensitive data, data storage, Internet access, email access, updated applications and hardware, and user training. Changing the environment would affect the organizational structure and culture of Pathfinders. This paper discusses the organizational changes that occurred due a change in technology.Technology TransferTechnology transfer describes activities that have the aim of establishing measurable process improvement through the adoption of new practices. Assistive technology reduces the gap experienced by disabled and elderly individuals in accomplishing daily activities. Some of these technologies are text telephones, Braille computer monitors, infrared pointing devices, artificial limbs, and assistive software. Introducing and encouraging the use of these technologies and many others to Pathfinders’ consumers, is a responsibility of the independent living specialists.The independent living specialists assist the consumers in identifying the assistive technologies needed, applying for funding to purchase the technologies, and educating the public on the various technologies available. However to provide its services to its consumers, Pathfinders had to adapt to current information technologies.A Strategy for Technology TransferRecognizing the relationship between technology transfer and process improvement is fundamental to Pathfinders’ approach to change. Technology cannot be changed without some impact on the process or personnel that use the technology, be it an increase in productivity, a reduction in cost, or a fundamental change in method. A number of key issues had to be addressed for the technology to be successfully transferred. These are divided into several categories; technology issues, process changes, and changes in culture.Technology IssuesPathfinders would join the Information Age by installing, new computers, file servers, network printers, a local area network (LAN), and Internet access. The installation process required preparing the PCs before delivering them to Pathfinders, then a visit to the office site to build the network and deploy the equipment. The PCs were standardized on Microsoft applications. Following the installation of the network, etc., training on the use of the software was provided. With the installation of the infrastructure complete, each independent living specialist and the executive director had a personal computer, email, and Internet access.Designing and building a training center provided the opportunity for anyone to come in and learn more about computers and office application software. Pathfinders provided some basic training courses. Additionally, computer books were available for use with the computers to learn how to use the programs. Access to the Internet was provided. Funding was allocated through federal funds to support the changes in technology.Process ChangesBefore the technology changes, there were only two stand-alone PCs available for use by the staff, these PCs were very old, running DOS applications. Employees were forced to share the PCs or use typewriters to complete correspondence. Data was maintained on floppy disks and hardcopy. Access to the Internet for research was accomplished by going to the local library, which consumed valuable resources of time and personnel. Deploying the new infrastructure significantly changed the way the employees worked. The changes in infrastructure gave real-time access to the Internet, consumer data, and improved data security.Changes in CulturePrior to the deployment of technology, the employees were equal in their knowledge of using the available tools at Pathfinders. With the delivery of their network, a fundamental change occurred within the employee dynamics. An atmosphere of resentment developed due to an imbalance of knowledge and workload. Some of the employees went out of their way to grasp the advancement in technology thereby, improving themselves and their work processes. They pursued the educational opportunities offered to them by Pathfinders and enhanced their knowledge of computer applications. Productivity for these individuals increased, causing an increase in satisfaction by Pathfinders’ consumers.Conversely, there was a minority of employees, who took a stance in not excepting these changes. These individuals spent much of their time complaining that they could not do the work using the tools provided, or repeatedly requested help from the employees that understood the technology. Defense mechanisms were employed to justify their reactions to the new technology. These employees viewed the technology change as a threat and wanted nothing to do with improving their computing skills or their work environment. However, as training and practice in using the improvements to the technology progressed, acceptance began to increase and resistance began to decrease. Change is difficult in all organizations but to stay in business Pathfinders was forced to change with the times.Pathfinders operations depend heavily on federal grant money. Each year Pathfinders must forecast how that money will be spent and report that the goals of the previous year have been met. The Federal reporting system began as a hardcopy report that evolved to an online reporting system. Without the changes in technology, Pathfinders would find it difficult to apply for Federal grant money or report its disbursement.ConclusionCareful consideration was employed to determine if a change in IT infrastructure was warranted within the Pathfinders organization. Potential obstacles were identified and anticipated. One of those obstacles was the affect that a change in technology would have on the organizational culture of Pathfinders verses the improvement in customer service. Pathfinders identified that resistance to change and fear played a role in the effectiveness of the change. Additionally, Pathfinders identified that as the staff moved along the learning curve, acceptance of the technology increased and fear of the technology decreased.
Understanding the Communication Process – The Key to Organisational Success
The process by which one person or a group of persons receive an increment of information which has some value for either sender or receiver either by way of knowledge addition or entertainment or acquisition of energy to act or persuasion to buy or act as required by the sender is the process of communication.The Process of CommunicationThe critical part of communication is the information, which is being transferred. Information may be in any form- ranging from hand signals to public speech, from email to detailed contract, from one word greeting to a lengthy letter, from a message on a notice board of a school to a full page advertisement on a daily, from a hint with raised eyebrows to five-minute hug, from a memo from a superior or subordinate to a HR manual and so on. For the transfer of the information or the message, certain vehicle or medium is employed, which loads itself with it and passes it on to the intended receivers. Paper, phone, one-to-one meeting, public meeting, conversation, hoarding, newspaper, words written or spoken, body gestures, smile, books etc are the vehicles or media. The way the vehicles take and transport the information in such a way that the receiver understands it as it should be is the communication process. The medium or the sender or the receiver characteristically distorts the information, which in one way or other contributes fully or partly to the failure of the communication in accomplishing the purpose intended.Two important stages of communication are a) encoding and b) decoding. The process involved in these two stages is a potential source of communication failure. Encoding is translation or conversion of the idea or intention or message into words or signals so that receiver would reconvert the same as intended by the sender. Decoding is what the receiver does to reconvert the received words or signals into the idea or intention or message as originally intended by the sender. The problems associated with encoding or decoding are due to the fact that words or signals have multiple meanings and thus there is a possibility of either use of wrong words or wrong signals or understanding them in a way different from what is originally intended.Understanding of the process of communication would facilitate transactions. Else, the there would be no action at all or delayed action if at all there is some action or wrong action or relationships turning bad and so on. For instance, a boss tells his secretary that a meeting with contractors is urgent. But he finds to his surprise that a meeting has been convened quickly the next day morning, but it clashed with another program, which the secretary is not aware. The boss, in this case, while being busy with office routine overlooked the process involved in passing messages and the attendant chances of communication going wrong in many of the stages. He failed to specify the time. But the secretary understood it as next day morning. This illustrates how the process involved in encoding and decoding goes wrong and thus it springs surprises.All the elements involved in communication which constitute the communication process are a) sender b) receiver c) message c) encoding d) decoding e) channel f) noise g) feedback.The following brief discussion explains the process of communication.Sender: The point from where the message originated, here the boss, is the sender. The action intended to happen out of this message is convening of a meeting urgently, but definitely not the next day morning.Message: Message is the essential content of communication or information intended to be passed. The request for convening of meeting is the message.Receiver: The person who has to take delivery of message is the receiver. Here the secretary is the receiver whose job is to understand exactly and act on it as intended by the sender.Encoding: The idea of convening a meeting, in this instance, has been converted into words, probably with facial expressions signaling the urgency of meeting. Such process of converting an idea is words or expressions is encoding.Channel: The encoded message needs a vehicle or a medium to be transported from sender to receiver. The vehicle may be a paper or a telephone or Internet or meeting or conversation. In the present example, oral communication made by the boss to secretary is the channel.Decoding: The process of understanding by receiver of the message given by the sender. In this example, the secretary while decoding understood the message given by the sender.Noise: Noise is the causative factor for the message being miscommunicated or misunderstood due to the problem either in the medium chosen or encoding or decoding or in some stages of the process. In this instance, the message was not properly constructed and hence the secretary did not understand it as intended by the sender. The noise in communication is analogous to the external noise generated by cable or transmission equipment of land line telecommunication while the subscribers talk on land line phones and hence they don’t listen or understand the words exchanged.Feedback: The sender would be communicating back to the sender his or her evaluation or how he or she understood about each part of the message or word before the sender goes further in acting on the message. Here in the present example the secretary did not give her feedback about what she understood and thus the intended message failed.While what was described in the preceding paragraphs is a general understanding of the concept of communication process, a brief study of various theories propounded till date would facilitate a fairly in-depth understanding of the communication process. The same has been attempted in the following paragraphs.Aristotle Theory of One Way Communication: Aristotle proposed that communication has three components- sender, receiver and message. It is a simple and basic model, which, nevertheless, laid base for the rest of the theories to come up. Aristotle, at such an early period of evolution of social science, posited that communication is a one way process. It connotes that sender is responsible for good persuasive communication to happen. Neither the concept of noise nor the necessity of feedback in communication crossed his mind.Lasswell Model of Communication: Lasswell extended the communication theory of Aristotle to include another element, channel. Three important elements or components in this theory are a) Sender b) Message c) Channel. His theory posits that it is the responsibility of the sender to see that receiver understands the message, by choosing a proper channel. It is also a one-way direction of communication as that of Aristotle.Shannon-Weaver Model: CE Shannon and W Weaver, the engineers’ duo, proposed this theory in 1949. This theory was based on a mechanistic view of communication. This is the first theory, which recognizes that the message received is not the same as the message sent. This distortion is due to the noise present in the system.They introduced feedback as a corrective measure for noise. But, they did not integrate the feedback into the model. They proposed that feedback would start another cycle of communication process. The theory essentially posits that real communication takes place only when the message received and message sent are one and the same without any difference, which may be true for an engineering model. But the communication that takes place between individuals, which mostly happens without any machines, cannot be as perfect as assumed in the theory, since the filters in the individuals operate while both listening and sending. Filters are the attitudes, perceptions, experiences and evaluations that operate much before the actual communication starts. The action that takes place as intended is the proof of success of communication.The elements in this model are a) Information source b) Encoding c) Channel d) Decoding e) Destination f) Noise g) Feedback.Schramm Model of Communication: Wilburn Schramm proposed this model in 1955, which was considered to be the best of all the theories since it is evolved and comprehensive. It was proposed in three stages with some improvement in each successive stage over the previous one. These stages are also referred to as three distinct models.In the first stage, it emphasized on encoding process and source like that of Aristotle without any recognition for noise. It too was a one-way direction of communication flow.In the second stage, the emphasis shifted to the shared domain of experience of sender and receiver. The sender has to take into consideration, according to this theory, the needs and abilities of the receiver, which he must be aware of due to shared experience, and thus the selects the right channel and at the same time encodes the message in the way that can be understood by the receiver. Here the communication process is understood to be a two-way flow.In the third stage, the feedback was thought to be an essential element of communication system. In this stage of Schramm’s theory, the communication process encompasses sender, receiver, good channel, proper encoding, proper decoding, and feedback. The flow which ends with feedback starts immediately again to make a circular process.The Inferential Model of Communication: Prof.Mathukutty Monippally proposes a new theory called ‘Inferential Model of Communication’ emphasizing on symbols displayed and the construction of meaning inadequately from such symbols. The model assumes that there is no adequate and proper way to send a message, and nevertheless we send message through some chosen symbols, which again are not properly understood.Prof. Mathukutty (2001) explains, ” The inferential model assumes that we cannot communicate, that we cannot communicate, that we cannot share our message with anyone, that we cannot it in the minds of and hearts of others. And yet we want to communicate. There is no code that can capture our message faithfully and then be cracked clean by others. So we resort to displaying symbols….This procedure is generally satisfactory. Of course, we can go wrong; and occasionally we go terribly wrong. But this is the only means available.” ( Mathukutty M Monippally, Business Communication Strategies,2001, New Delhi, Tata Mcgrawhill Publishing Company Limited, pp 6-9)An Overview of Some More Models of CommunicationAnother model of Katz -Lazarfeld is the one related to mass communication, which states that the sender has to encode the message and transmit the same through mass media to an opinion leader. The opinion leader in turn transmits the same to the target audience, the public. This is also constructed as a one-way direction of information flow.Another model, which has taken a different path, is that of Westley – Maclean. It emphasizes on interpersonal communication. In this, the carefully encoded message is sent to the receiver who in turn sends it to either the sender or other individual with some changes. The model lays stress on sender, receiver and feedback, which make this model a circular one.One more one- way model is that of Berlo, which recognizes perception as an important element of communication. According to this model, any discrepancy in the reception of message due to influence of perceptions of intermediaries would lead to miscommunication. The important building blocks of this model are the source, the receiver, the meaning intended and the process of sending and receiving the message.Watlaw- Beavin-Jackobson, proposed a model of two-way communication with emphasis on the behavior of participants and the relationships existing among them to achieve communication success.Rogers-Kincaid proposed that for the communication to be successful, the individuals should be connected through social networks and sharing of information.ConclusionUnderstanding communication process is very critical to the managers of the organization. They should understand that communication is rarely understood as it should be. The distortion of the message can happen at any of the stages in communication process-sender, receiver, encoding, decoding, channel, message and feedback.