Get Started: Small business sends mixed signals

MIXED SIGNALS

Recent readings on small companies offer a mixed assessment of the state of small business.

Employment at small businesses fell slightly during June, according to the National Federation of Independent Business, which each month surveys the small business owners who are its members. Those who participated in the survey said they cut their work force by an average 0.1 workers per firm last month. That was the first drop in employment since December. The number of owners who planned to hire fell 7 percentage points to 10 percent. The NFIB found hiring plans were lowest in New England, but rose in the Mid-Atlantic states. Strength remained in states west of the Mississippi.

But Intuit Inc., which makes software for small and mid-sized businesses, says its customers are hiring. The company says its employment index for June shows that small business employment rose 0.3 percent nationwide last month. It said employment rose in all sections of the country except the West North Central region, which includes Minnesota, the Dakotas, Nebraska, Kansas, Iowa and Missouri. Payroll services provider ADP said last week that small businesses added 93,000 jobs in June.

Intuit did have some negative news: Its customers' revenue fell .12 percent in May. But it said revenue rose at construction and real estate companies — a reflection of the gradual improvement in the housing market.

And the National Association of Manufacturers reported that smaller manufacturing companies are more pessimistic than their larger counterparts. The NAM says small manufacturers expect their sales to rise nearly 2.8 percent during the next year. Medium-sized manufacturers expect sales growth of 4.8 percent, and larger firms anticipate their sales will rise 4.4 percent.

FEDERAL CONTRACTS

Small businesses got $91.5 billion in federal contracts in the fiscal year that ended Sept. 30, but the government fell short of its goal of giving small companies 23 percent of the contract money that is available to small businesses. The Small Business Administration said nearly 21.7 percent of federal contract money went to small businesses. The government last met the 23 percent goal in 2005, according to the SBA.

The SBA has several programs under way that are designed to help small businesses win contracts. Among them: working with other federal agencies to increase their commitment to small business contracts and holding events to match small companies with federal agencies and offices that grant contracts.

There are also bills in Congress aimed at increasing the amount of contracts that go to small businesses.

LOAN DEADLINE APPROACHES

Small businesses that have what are called Small Business Administration 504 loans have until Sept. 27 to refinance them under a provision of the Small Business Jobs Act of 2010. Loans under the 504 program are for fixed assets such as real estate, buildings, renovations, furniture and equipment. The assets are used as collateral for the loans, which carry below-market rates.

Normally, 504 loans can't be used to refinance debt unless a business is being expanded. The Jobs Act allows businesses to refinance the loans even if they're not planning to expand. The temporary change was allowed so companies could have more cash to meet their needs, and, it was hoped, to hire more workers. After Sept. 27, companies with 504 loans won't be able to refinance without showing that they plan to expand.

You can learn more about the 504 loan program at www.sba.gov/content/cdc504-loan-program

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Joyce Rosenberg can be reached at https://twitter.com/JoyceMRosenberg

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