The Business Press: Basic beginnings

IE Women’s Business center focuses on teaching, mentoring programs

04:47 PM PDT on Thursday, May 20, 2010

Contributing Writer

If you didn’t know where to look, you could easily drive by the Inland Empire Women’s Business Center.

Situated in a nondescript office building within one of several office parks along East Airport Drive in San Bernardino, the center offers a number of programs and services to meet the needs of women business owners or those looking to go into business for themselves in Inland Southern California.

“Our mission is to council, teach and inspire women-owned business owners at every stage of developing or operating their business,” said Nicole Kinney, director of the center. “We do that through our low-cost business training and our mentoring program.”

Those programs focus on general business and management issues, business startup, gaining access to capital and federal contract issues. She said these days the center’s clients fall into two categories: those who are unemployed and “seeking an opportunity through entrepreneurship,” or those who have their businesses up and running and need additional guidance.

Kinney, who was named IEWBC’s director in October, said the vast majority of programs or workshops offered are free, while other classes range in cost from $15 to $125.

“Our three-part QuickBooks training session is our most expensive class, costing $125,” she said.

For those thinking about starting their own business, the center offers a starting your own business workshop one Saturday a month in San Bernardino and one Wednesday a month in Corona.

“It’s a free workshop that gives them the nuts and bolts about getting their business started,” Kinney said in an interview. “It includes sources and criteria for financing, business plan writing and a class about permits and legal help.”

But she cautioned that starting a business isn’t for everyone and figured that almost half of those who attend drop out after the first class and didn’t have any further association with the center.

“Some people say it’s too much work,” she said. “That’s a success. You don’t want to see someone invest their life savings into something they are going to get tired of or don’t have the time for. Running your own business is not for everyone.”

Kinney said many budding entrepreneurs are there to get help with picking a “legal structure” for their business. For example, a majority of participants choose to set up their business as a sole proprietor for a number of reasons, including the low upfront investment, she said.

The ABC’s of starting your own business course also goes over the 5 C’s of credit. The five key elements a borrower should have to obtain credit are: character, capacity (sufficient cash flow to service the obligation), capital (net worth), collateral (assets to secure the debt), and conditions (of the borrower and the overall economy).

“We talk a lot about credit, because not a lot of people have a strong grasp about credit,” she said. “They need to know what a good credit score is and if they don’t have good credit the steps they can take to improve it.”

The ABC’s course also offers an analysis of each participant’s business plan. Kinney explained that it was crucial to make sure “they weren’t getting into a business that’s declining” and that their business idea was feasible.

“It’s not our responsibility just to tell them its a bad idea, but it’s our responsibility to explain to them how their idea isn’t going to work,” she said.

She said about 20 percent of the business plans are rejected. Other business plans, she explained have to be reworked before a client’s idea can be financially feasible.

“Most people’s business plans focus on the goal,” she said. “They want to open a restaurant, but they don’t look at it as something they can do in phases. They can begin by renting space in a shared kitchen and open a catering business. It’s less overhead and they can build up their cash flow and eventually have enough assets to open. So part of what we do is break down that larger goal into manageable pieces.”

Founded in September 2003, the IEWBC, which is part of the The Inland Empire Center for Entrepreneurship at Cal State San Bernardino, has continued to change they way it does business as business conditions in Inland Southern California have changed. Today, most of the business plans presented to its staff are for home-based or online businesses rather than for traditional bricks-and-motar businesses, she said.

“As the nature of business changes, we have to be able to adapt to that,” Kinney said. “We now have a social networking presence. We have a Facebook fan page, and we use Twitter because that’s what our clients are doing. The biggest thing social networking can do is create awareness. If our clients are online creating awareness about their business, we should be doing the same thing.”

The IEWBC received $115,000 in federal funding for the fiscal year that ends Sept. 15. The rest of its estimated $260,000 budget was funded by local municipalities and several large financial institutions.

“We’ve had to do more with less this year,” Kinney said. “We do receive some private donations through our website. We are the opposite of a business. We get our money upfront and we produce the results in order to have that funding renewed for another year.”

Despite the ongoing struggles to raise money, Kinney stressed the center had achieved its ultimate goal over the past seven years of creating or retaining jobs in the Inland Empire. Since its creation, the IEWBC has created or retained 453 jobs with an economic impact of $8.55 million within the two-county region, according to figures complied by the center.

“We have plenty of clients,” she said. “The challenge is to stay on top of the trends … and the other things our clients need. I think we are doing a pretty good job. We help everyone and anyone who knocks on the door.”


Market News International: California Watch

15:48 EDT 07/07

California Watch: State IOUs Sought On eBay,Craigslist;Pay 3.75%>

–Regulator’s Respond to Offers for IOUs

–Would-by Buyers seek Calif. IOUs on Craigslist, eBay

–Calif. Treasurer Issues IOU Trade Rules

–CalPERS Not Affected by State’s IOUs


By Chris H. Sieroty

   LOS ANGELES (MNI) – Buyers of California IOUs will have to prove they are the legal owners of the promissory notes to cash them in when they mature in October.

   That was the warning Tuesday from State Treasurer Bill Lockyer’s office after reports that the IOUs, or registered warrants, were being sought by third parties on Craigslist and eBay.

   Tom Dresslar, spokesman for the treasurer’s office, told Market News International the treasurer’s office won’t redeem the state’s IOUs without a notarized bill of sale signed by the payee whose name appears on the note. He said Lockyer had asked Craigslist, eBay Inc. and any other marketplace that helps sell the IOUs to post a notice of the policy on their sites.

   About $3.4 billion in IOUs are expected to be issued this month because California legislators have been unable to close a $26.3 billion deficit in the state budget. The first in a series of notes were issued late last week to residents who are owned tax returns from the state.

   The IOUs carry an interest rate of 3.75 percent payable after Oct. 2. That high interest rate has attracted investors hoping to profit by buying them at a cheap rate and redeeming them later.

   The idea is that investors will pay less than the face value to businesses or individuals that receive IOUs but need cash immediately to meet payroll or pay other expenses. Once the IOUs mature, the investors will cash them in for their full value plus the 3.75 percent interest the state is offering.

   “We buy California IOU’s. Got shafted by California with an IOU check? Need cash NOW? We buy California issued IOUs and give you cash IMMEDIATELY at $0.85 per dollar,” reads one ad on Craiglist, surrounded by classifieds seeking the likes of a Serta full or queen mattress and an Xbox 360 game console.

   “Sell your government IOU for cash” advised the banner headline at a brand-new Web site,

   For now, most IOU holders can simply deposit them. A number of major banks including Bank of America, Wells Fargo and Citibank will accept IOUs until July 10. But the banks haven’t said they’ll take IOUs after Friday.

   Dresslar said if banks don’t extend the deadline for accepting the state’s IOUs, recipients have two choices: either hold on to them until you are able to redeem them on Oct. 2 or sell them to someone other than your bank.

   “If you don’t need to cash it you hold on to it,” he said. “There are probably a lot of people who will pursue other opportunities to cash in the IOUs.”

   Meanwhile, retirees who get their pensions from CalPERS as well as CalPERS’ vendors are not affected by the state’s decision to pay some of its bills with IOUs.

   The California Public Employees’ Retirement System says retirees and beneficiaries will receive regular payments just like they have in the past. CalPERS employees, vendors, contractors, investment managers, health plans, and other providers of goods and services will also receive regular payments.

   The state’s plan to pay some of its bills with IOUs, officially called registered warrants, is caused by a cash shortage in the state General Fund. CalPERS is a special fund agency and is, therefore, not affected, it says.

   With approximately $182 billion in assets, CalPERS is the nation’s largest public pension fund.


             ** Market News International **


MBA reports Mortgage delinquencies hit record in first quarter

By Chris H. Sieroty

California and three other states continue to account for almost half of the foreclosures starts in the nation, according to the Mortgage Bankers Association.

In its report released Thursday, the trade association reported that foreclosures were at record levels, with 1.37 percent of all home loans nationally starting the foreclosure process in the first quarter of 2009. This was a 29 basis point increase over the fourth quarter of 2008 and a 36 basis point increase from one year ago.  Both the level of foreclosures started and the size of the quarter over quarter increase are record highs.

In California, Florida, Nevada and Arizona the rate of homes entering foreclosures was 2.45 percent, the report found.

“Those states continue to account for about 46 percent of the foreclosure starts in the country, and represented 56 percent of the increase in foreclosure starts, including half of the increase in prime fixed-rate foreclosure starts,” said Jay Brinkmann, MBA’s chief economist. “It is difficult to overstate the severe impact home price declines have had on mortgage performance in those four states.”

Brinkmann said absent those four states, the national foreclosure rate would have been 1.01 percent.

“The increase in the foreclosure number is sobering but not unexpected,” Brinkmann said in a release. “The rate of foreclosure starts remained essentially flat for the last three quarters of 2008 and we suspected that the numbers were artificially low due to various state and local moratoria, the Fannie Mae and Freddie Mac halt on foreclosures, and various company-level moratoria. Now that the guidelines of the administration’s loan modification programs are known, combined with the large number of vacant homes with past due mortgages, the pace of foreclosures has stepped up considerably.”  

Brinkmann didn’t expect the mortgage default rates to begin to decline until after the employment situation in California and nationally begins to improve. The MBA’s forecast is that the unemployment rate will not hit its peak until mid-2010.

“Since changes in mortgage performance lag changes in the level of employment, it is unlikely we will see much of an improvement until after that,” said Brinkmann.

If there is any good news in the MBA’s report, it’s that California is not the worst state nationally in terms of foreclosures. That distinction belongs to Florida, where 10.6 percent of mortgages are somewhere in the process of foreclosure, followed by Nevada, 7.5 percent, Arizona, 5.6 percent, and California, 5.2 percent.


Market News International – California Watch

13:27 EDT 05/20 

California Watch: Voters Render Verdict – Bring On Layoffs>

–Voters Defeat Budget Recommendations, Leave $21.3 Bln Deficit

–Governor Seeking Federal Guarantee to Sell $6 Bln in Bonds by July

By Chris H. Sieroty

     LOS ANGELES (MNI) – California voters, by defeating a series of ballot measures that Gov. Arnold Schwarzenegger and lawmakers had placed on the ballot as a way to narrow the state’s latest budget deficit, have set the stage for unpaid state bills as soon as July.

     Just one of the six measures passed in a special election held Tuesday. 

     Proposition 1F — that bans salary increases for Sacramento lawmakers in years the state runs a budget deficit — was overwhelmingly approved by voters. 

     Proposition 1A would have imposed new restrictions on state spending while temporarily extending a series of tax increases approved by lawmakers in February to close a nearly $42 billion shortfall through June 2010. 

     A companion measure, Proposition 1B, would have given educators $9.3 billion they claimed was due under Proposition 98, the 1988 initiative that set minimum spending levels for schools and community colleges. 

     Three other measures — Propositions 1C, 1D and 1E — had promised to raise more than $6 billion this summer to help close the state’s budget deficit. For example, Proposition 1C would have allowed the state to borrow $5 billion against future increases in California Lottery revenues. 

     After the polls closed, Gov. Arnold Schwarzenegger said: “Tonight we have heard from the voters and I respect the will of the people who are frustrated with the dysfunction in our budget system. Now we must  move forward from this point to begin to address our fiscal crisis with constructive solutions.” 

     Moving forward means increased cuts to state programs to balance the budget. The governor has called for an increase of $2.3 billion in budget cuts for education on top of $3 billion in cuts that were already planned. He has also called for a $400 million cut in prison costs by shifting inmates to local and federal authorities. 

     He has also announced plans to layoff 5,000 of the state’s 235,000 workers, selling off state properties and possibly reducing eligibility for healthcare programs. 

      Anti-tax opponents described the special election as voters sending a clear message that lawmakers had failed to solve the state’s budget problems. “With this election, the people of California have sent a clear message to Sacramento,” said state Sen. Dennis Hollingsworth, R-Murrieta. “They know that their government has failed them. They have lost confidence in government to fix the budget or the problems they face every day.” 

     California faced a shortfall of $15.4 billion for its next fiscal year even if the measures were approved. Without voter approval, the state now faces a $21.3 billion deficit, according to the governor. 

     The budget recommendations were designed by the governor and lawmakers as a way to balance the state’s books through mid-2010. With the special election over, the state now faces a cash crunch that could render officials unable to pay bills come July. 

     Schwarzenegger and lawmakers are meeting late Wednesday to discuss new proposals to keep California solvent. 

     Both the state Senate and Assembly are expected to hold public hearings Thursday to debate budget details. State Treasurer Bill Lockyer and Controller John Chaing are expected to appear before legislators Friday to warn them about the seriousness of the impending cash crisis. 

     Both Democrats and Republicans are to introduce separate proposals to deal with the state’s budget shortfall. “Senate Republicans have heard the voter’s message and are committed to overhauling and reforming that system to make it work for them again,” said Hollingsworth, the GOP Senate leader. 

     “We will be unveiling solutions to end the cycle of permanent budget crises, make government work efficiently, help create new jobs, and change the self-serving culture in Sacramento,” he said. 

     But as lawmakers debate how to close the state’s budget deficit, the state’s plan to sell $6 billion in revenue anticipation notes in July could be threatened by its worst-in-the-nation credit rating and concerns on Wall Street about a lack of tax revenues for debt service. 

     The governor, who was in Washington D.C. Tuesday, met with the state’s congressional delegation to gain their support for federal guarantees to ease investor’s concerns. Last week Lockyer urged U.S. Treasury Secretary Timothy Geithner to extend debt guarantees through the $700 billion Troubled Asset Relief Program to states and local governments to help them borrow short-term funds.


         ** Market News International Los Angeles ** 


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