Once a week, PointBlank will deliver a roundup of small business news and advice from around the nation.
The Rise Of P2P Lending
Reuters has an intriguing look at the sudden rise of peer-to-peer lending, in which lenders band together to post anywhere from $25 to $1,000. It’s sort of a cumulative loan, and it bypasses banks entirely.
Speaking of which, banks really don’t have anyone to blame but themselves if this system takes off, given their pathological reluctance to lend during and after the recession. I know that’s not entirely in their hands, but B2B lenders like Direct Capital have been operating, making capital available and staying alive during that time. The reluctance of banks has cost them.
That said, I’m cautious about this kind of lending. As Reuters notes, many small businesses and start-ups who are ponying up this money could go under, or the business they’re lending to can. That creates a problem, as does the notion of paying back dozens of disparate lenders in a timely fashion without running into confusion.
I’m not saying the process can’t be refined, or that this won’t work. I just have a healthy dose of skepticism in my flask at the moment.
Business Is A Team Sport
There’s a fairly spirited debate afoot about which is better in the world of business: A star performer or a team of above-average workers. The argument focuses on everything from the cultural fit of employees to the amount of money you spend on one employee versus a gaggle of them, and I don’t claim to be the ultimate arbiter of all things employment.
I think LeBron James taught us during his Cavalier days that it’s difficult to win with one star and a subpar supporting cast. Unless you have a very small business, I believe it’s almost always better to have a team of competent, hard-working people who can get the job done well together.
Practically speaking, it’s better because you’re not relying on one guy to carry your brand, especially because individual people have a bad habit of getting sick, going on vacation or burning out over time. Go team!
Hopeful Signs In Small Business Lending
The Small Business Administration takes its fair share of flack—I’ve written about them before, and friend of the blog Chuck Blakeman is vocally critical—but they should be recognized when they do something well. To wit:
When it was signed into law, the Small Business Jobs Act of 2010 established a $30 billion fund that encourages lending to small businesses by providing capital to qualified community banks with assets of less than $10 billion. The Small Business Lending Fund provides those lenders with low-cost capital with an interest rate as low as 1 percent if they best their 2009 small-business lending levels–a strong incentive to dole out the dough.
SBA chief Karen Mills is hopeful about the community bank option. “I’ve worked with a lot of small businessesover the years. They like the relationship they have with community banks,” Mills notes. “Those lenders know what’s happening on Main Street often better than anyone else.”
Anything that frees up access to lending for small businesses is an enormous boon these days. Give the SBA props for trying.
A Great Small Business Interview
I’ll refer you to our friends at BizEngine, who interviewed Outspoken Media Inc. Chief Branding Officer Lisa Barone and came away with an interesting series of answers on balancing work with life outside the office. It’s a highly recommended read.