Running a small business can be hard, with all the loans and other complicated things you have to take care of, but these things are important to research and understand. Financial institutions use a number of economic modeling tools to assist in their business practices. One such model is the Current Expected Credit Loss or CECL standard that replaced the ALLL standard in 2016. This model is used to predict probable credit losses that result from default events over the life of the financial product. There are other standards and policies used by lending institutions which can affect acquiring a loan.
If you want to be a successful small business owners, you’ll want to be fully cognizant of all newly implemented and upcoming regulatory changes for small business loans. Here are some factors you’ll want to take a look at that could affect credit loss for your loan.
Policy changes for small business loans can be changes specific to a particular financial institution, or they can be changes initiated by a government entity. Financial institutions that offer traditional loans have to follow government regulatory policies when offering and administering traditional small business loans. The Small Business Administration makes policy for government-backed business loans, and they have recently proposed several changes that will affect small business loans. These changes and others could be beneficial or not for your current loans, and you may want to consider paying off or refinancing your loan in order to acquire a new loan with better terms.
Qualitative & Environmental
Besides real financial numbers, qualitative and environmental factors like employment history, length of time for money accounts, length of time in a residence and even social media activity are also examined. It's helpful to understand the purpose of qualitative and environmental factors in CECL. Qualitative factors are used to give a picture of the borrower's financial life. The new CECL policy will be used to consider the "life of the loan" when estimating an expected loss. Qualitative factors will be expanded and will include the borrower's financial condition, business prospects and the nature of the assets. Geographical and grouped statistical data can also be taken into account, and the areas the business is operating may affect acquiring a small business loan.
Loan Criteria Changes
Certain regulatory changes that are either recently implemented or are being proposed can change how a financial institution calculates credit loss. One such change is a proposal to have a standard set of requirements for underwriting, loan processing, servicing, closing, litigation, and liquidation. In 2014, the SBA removed the "Personal Resource Test," which required the business owners to provide personal liquid assets in order to reduce SBA-guaranteed funds for the loan. In 2018, the SBA proposed a new personal resource test. Lenders want a good partnership with local businesses.
Granting loans to small businesses is one way that these financial institutions can help their communities and their own businesses as well. However, these lenders are required to follow specific laws and regulations as related to their lending policies. When you understand the factors that are involved in the lending process, then you will naturally be able to have a more profitable experience with your lending partner.
If you’re looking to get some help with running your own small business, take a look at our services and see how CAIS can help you!
Entrepreneurship is a beautiful journey. There’s so much to learn about business and yourself. Because there’s so much to learn starting out, it’s important to build a strong foundation in the beginning, it could mean the difference between being part of the 30% of small businesses that make it past 5 years and being a part of the 70% that fail. Marlita Hill, founder of Niche Nailers understands the importance of building a strong foundation in business and has dedicated her work to helping entrepreneurs to start out on the right foot.
Being an educator for 20 years it’s no wonder why Marlita begun helping small business owners through education. As in the name of her business, her subject is niches, teaching the importance of them and how to identify and utilize your business’s niche.
“I’ve developed a process its 5 exercises...a strategy/process to help guide entrepreneurs through defining their niche.”
Wondering what a niche is? To keep it simple, it’s a small market segment. For example you have the industry that your business falls within, then you refine that a bit more to get the ever important niche.
Marlita is able to help entrepreneurs nail their niche because she too went through the process of not knowing her niche. Asking the wrong questions, to the wrong people, just to later figure out that she was going after the wrong audience. Upon figuring out her niche, she was able to tap into the right audience and ask questions that were relevant to her business and mission.
“One of the things I’m good at is being an anthropologist of my own experiences and extracting principles from that. And helping people through what I’ve learned and gone through so that they don’t have to make the same mistakes.”
Starting a business comes with financial responsibilities, a fact Marlita knows well and has struggled with just like many other entrepreneurs. Starting a small business on your own without loans, a big savings account or some other form of financial support has been the reason many never get started. But Marlita didn’t let money stop her from building her business and sharing her knowledge with other entrepreneurs.
She overcame the lack of financial support with community, networking and resourcing. She finds these to be underappreciated parts of business, and I couldn’t agree more. It’s crucial to build a business community aside from your community of friends and family. These business friends help you to get through obstacles that you couldn’t have gotten through on your own. It also helps entrepreneurs not feel completely crazy when the rest of the world thinks they are. One of the best ways to get started networking in your community is by going to events, and showing your face, telling people what you do, and listening and learning about what they do too. While networking and building community you’ll find that you’re also gaining valuable resources.
Powering through financial obstacles can be hard for anyone. But the result of never giving up on your vision is rewarding. For Marlita the most rewarding aspect of running Niche Nailers is; “When a client says; Oh my God. I understand my business now...this was so simple.” because it validates all of the crazy hell you go through as an entrepreneur to build your business, when you hear that what you’re doing is making a difference and valued by your customers/clients.
Hobbies Aside From Educating
Salsa dancing & couch surfing/hanging out with friends face to face.
TIP For Entrepreneurs
Ask questions. Don’t do this in ignorance, ignorance is expensive. Find someone you can trust to answer your questions.
Person of Inspiration
Rekesha Pittman- Marlita’s coach. Inspired by her trajectory and how she has built herself and her business over time.
Connect with Niche Nailer's online.
“I want to leave this world better than I found it. The Lord did not give me these experiences or this knowledge for me to hoard it and not share it with anyone who is willing to listen.”
In entrepreneurship it’s common to wear many hats over a span of time. Jacqueline Smith has certainly tried on a few, some she continues to wear and some she’s hung up. Each of them taught her something valuable that she now shares with her audience via her radio show, You Have the Power.
Starting a radio show wasn’t initially in Jacqueline’s plans. However, she knew that she had a strong desire to make a difference in the lives of women, especially those over 40, who are on this journey of entrepreneurship or self-fulfillment. This desire was bread from the countless experiences she was made aware of, where companies refused to employ women over 40 due to their age. Going as far as stating that they were too old for the job in some cases. Other times they were a bit more discreet. While helping fight this issue of age discrimination Smith was encouraged to write a book.
After going to a webinar on book writing Jacqueline was more inspired and ready to take action. She stayed after to speak with the course creator. What she found out would have stopped many from pursuing the dream, the course was $15,000! Quite a hefty ticket but the dream lived on and Smith found that there was a similar class being held in her community for significantly less. In November 2018 Smith published her first book You Have the Power - Turn Your Knowledge Into a Lucrative HR Consulting Practice. From the publicity of her book the opportunity of a radio show presented itself. LSW Media group was born and her show You Have the Power.
Jacqueline's radio show focuses on the God given power within all of us and the choices we have to tap into it. Tuning in you’ll be introduced to various entrepreneurs who have tapped into this power or are in the process of doing so.
In recent years there have been all sorts of health crazes as we realize that our food isn’t as good as we would have hoped. We’ve seen diets like veganism grow in acceptance, grocery stores and restaurants changing their food choices and people as a whole making more informed health choices. Samantha Cobb, was among the many who chose to change the foods she was consuming to live a better life.
For the past 7 years or so Sam has begun making juices and smoothies to increase her fruit and vegetable intake. This change came to be after having 2 heart attacks and coming to terms with other health issues she was facing. She realized that with a lifestyle change she could turn her health around and be around for her family.
In February this lifestyle change became her brand Anja Boost juice and smoothies, and Sam set out on a mission to help others also make a healthy change in their diets.
We are only limited by the limitations that we place on ourselves. There’s an entire world out there for us to grab, to view and to be a part of too. It’s up to us to go out there and claim what’s ours, to enjoy everything this world has to offer us. Travel agent Alysia of Precious Travel Agency, understands this.
Most of her life she’s traveled, gaining new experiences and knowledge. As a new mother she aims to share these experiences with her daughter. Although traveling was in her from an early stage in life she didn’t initially see being a Travel Agent in her future. She chose financial freedom when she realized her degree would not be utilized in the small town she resided in. This choice makes it possible for her daughter to grow up and not ever see her mother struggle financially.
The life of a travel agent isn’t sunshine and airplanes; well at least not completely. Alysia is a full time mother who also takes care of her grandmother so she’s only able to be a travel agent part time for now. Plus whenever you’re working with customers there’s going to be challenges. Alysia has been faced with the struggle of putting together extravagant vacations with small budgets. There’s a misconception that travel agents can “move mountains” when planning a trip. While they can work out amazing deals there’s only so much wiggle room.
That didn’t stop Alysia from not only pursuing her financial freedom via travel but also she insures that she pulls together amazing vacations for all of her clients. She puts together a variety of travel options, and spends time learning what clients like/dislike so that she can get creative with planning a trip that opens her clients up to new and exciting things...without scaring them. This way Alysia’s goal to share her experiences with her daughter remains achievable each time she opens up the world to her clients and herself.
Women are nurturing by nature. We are wired to care for others on a different level than men. In our society we are taught to do so. For Black Women, the care of others has been put before our own in several different ways. I’m sure you’ve heard the term “Strong Black Woman” at some point in your life. Well that actually breeds weak women, appearing to be strong on the outside, while slowly dying on the inside.
Being a Black Woman and feeling the stresses that come along with that title are exactly why I jumped on the opportunity to learn more about Zakiyyah Walker and her business With Zakiyyah-Personal Revolution Coaching For Black Women.
Zakiyyah is a woman on a mission to heal Black Women. In this mission she’s helping herself and others to create a legacy while transmitting the negative energy from the disconnection associated with slavery. This ancestral trauma passed down through generations has created the strong black woman syndrome. However like any other conditioning it can be reversed.
Entertainment is a tough business to break into. You have to be great at what you do and continue to “bring it” throughout your career...or you won’t have one. Cherry Washington of CEM&M Entertainment LLC, learned that very early into her career in the entertainment business.
Washington was introduced to entertainment while working at the Michigan State Fair. She was working to raise money to go to college. Being the first in her family to go to college, and the racial protests happening at the school of her choice caused her mother to fear this transition. But nothing was going to stop her. At the fair Washington was attempting to be security, but due to her size, management moved her to the production department and where she was put in charge of the dressing rooms.
While working with the acts and managing their dressing rooms she started to learn how to manage the entertainment on a deeper level. Year after year the fair requested her return. Over the years working the State Fair Washington met a number of celebrities and began building a name for herself. Years later without knowing it she landed a job with MGM Grand in Detroit before they ever opened their doors. Upon opening, they announced who they were to the staff and cut the staff from 200 to 15. Needless to say Cherry Washington was one of the selected 15. After working for MGM for years and watching the crazy turnover rate of the entertainment business and being picked over for the well deserved promotion due to not gaining the degree needed, Cherry hung in there until they decided to remove the entertainment department, then she started on her own.
Everything went great for a while. Then Cherry slowed down a bit to be her ailing mother’s caregiver. Although doctors gave her mother 6 months she lived for 2 more years. During that 2 years Cherry was still running her business, but worked more remotely. Less than a year later Cherry lost her husband suddenly after he helped their son in subzero temperatures and froze from the inside out. Losing her best friend and biggest supporter was one of the hardest things Cherry ever had to face.
Thanks to her children and clients she grieved the way that she needed to and was pulled back up on her feet. Prior to her husband’s passing she had planned to move from Michigan to California. It was time to move forward and continuing chasing her dreams. There had been a lot for Cherry to adjust to, but her family, loyal clients, and friends were there to help her along the way.
After a 7 year run and a short break to grieve Cherry brought CEM&M Entertainment LLC back! Taking the business from the Midwest to the west coast. Today she represents a variety of clients, from musicians to athletes. Cherry picks her clients very carefully, looking at character just as much as talent/skill. The most rewarding part of being in the entertainment business, for Cherry is seeing her clients support a good cause and give back to others while reaching their own goals.
Like the boxers she represents Cherry got knocked down HARD but she got right back up and kept fighting. Thanks to an amazing team of supporters and a vision to help whatever community she’s in, Cherry looked at her situation and decided she is bigger than what’s happened to her and she can make a difference whatever the CAIS may be.
Connect with Cherry and CEM&M Online
Website | Instagram
Meet Guillermo Figueredo, owner of Awesome Web Designs, a Toronto web design company. After studying advertising and discovering the world of digital marketing it was evident to Figueredo that web design was home to his passion. With a mission to provide an online presence to businesses that previously didn’t have one he’s able to focus both his passion and creativity. However, like all Whatever The CAIS stories this journey wasn’t paved and clear.
Have you ever moved and found it hard to make new friends? Imagine leaving moving from Spain to Canada leaving everything behind! Immigration comes with its own unique challenges but Figueredo used this as an advantage. He understands that the world changes all the time and so should a business and therefore individuals. Adaptation is key.
Already out of his comfort zone in a new country Figueredo started a new position and began making connections and gaining experience. Those connections coupled with his education and new found passions led him to quit his job and start Awesome Web Designs.
What is a birthday party or wedding or any party without cake?! Well it’s no party. We have become accustomed to sweet treats making our events, well...sweeter. If you’re no good at baking or like me horrible when it comes to decorating, then you’ve probably gone to a bakery for your big event’s dessert. But what about a Pastry Boutique! Well that’s what this week’s entrepreneur, self taught pâtissier, Jazmin Johnson owner of PritzyPastriesByJoseOna is aiming for. Specializing in gourmet sweet treats for all occasions this goal is fitting. As sweet as her treats are, there have been some learning curves and sour moments.
Jazmin was forced into baking by an old boss and found out she not only loved it, but was really good at. Talk about being a natural! Today she bakes for her 3 boys, ages 7, 3 and 1, to continue creativity and leave a legacy. Although young they already find joy in helping mom in the kitchen.
Starting out getting the right equipment was a struggle, causing Jazmin to do much of the mixing using a hand mixer. As any mompreneur knows juggling children and a business can be tough. Especially when they are young. If that weren’t enough, Jazmin does this as a single mother while working as a dental assistant. Some would wonder how she has enough time in the day, but she’s passionate about providing the best pastries to her customers. Giving her customers one less thing to be concerned about for their event/party. This means producing orders efficiently, answering calls and texts all day long and working almost 24/7. Just to do it all over again when one of her boys sneaks a treat from a client’s order!
Being a small business owner isn’t always as glamorous as we sometimes make it out to be. Sure there’s a ton of freedom, which can be great but can also be a downfall for some. There are limitless possibilities out there when you go for them yourself. However the struggle can get real, and that’s when we make that hard decision to see it through Whatever The CAIS or pack it up and live a normal life. This blog is all about those tough times and how we overcome them to reach our goals. If you’re going through a tough time in your business or on your path to reaching any goals let these stories inspire you to keep at it.
My story is what inspired me to create #WhateverTheCAIS and the term itself. This story begins before I even knew CAIS was something I wanted to create. I’ll take you back to 2016….
December 2016 was the worst month of my life...at that time. I was 4 months into my new job as a property manager which at the time I thought was everything I wanted. On December 6, 2016, I’ll never forget that date, my regional manager walked in unannounced. First I was excited to see her as I thought she was coming for more of my training; which I desperately needed from her. I was wrong, she was there to fire me. I was devastated, 5 months pregnant with very little saved up.
I was sure, in my mind that my career was over. I had never been fired before, and had no idea how to deal with it. Eventually, after having my daughter and healing I began to look for work again. By June 2017 I had secured a commercial property management position as an independent contractor. All of the clients were local and small businesses. I found myself giving them advice and helping them build beyond just leasing an office in the building. When the building started to run out of space for small businesses, about 3 months into my working there, the light bulb turned on and I created a space for small businesses within the building. The following January CAIS was born!