This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

3 Things You Should Know About Small Business: August 3

NEW YORK ( TheStreet) -- What's happening in small business today?

1. Is the CARD Act hurting small businesses trying to get credit? It's no secret that small business lending has clammed up since the recession started for a number of reasons, including weaker demand, a weak real estate market making it tough to get home equity lines of credit and tougher overall lending standards. But another factor may be the CARD Act, which went into effect in 2010, offering new protections for consumer credit cards (but not business cards), making many business owners shift their credit to personal cards.

While it's still unclear how much the CARD Act affected small business borrowing, it could be substantive, says Bloomberg BusinessWeek contributor Scott Shane.

Business cards are an important source of credit for small business owners. A National Federation of Independent Business report cited in the article found that small business owners who use personal credit cards for business increased from 42% in 2009 to 49% in 2011, while those who used business credit cards declined from 64% to 59%.

"Swapping cards might not seem significant, but it does illustrate how crucial access to credit is and how important it is to identify and address the factors constraining it," Shane writes.

2. Could you use an incubator? New business owners often try to go it alone when just starting out, without mentors and without outside help, but for some businesses an incubator could be a good way to kick start operations, says Access to Capital, a small business financing resource by Dun & Bradstreet Credibility.

Incubators can provide a small company space and equipment rentals for a low price as well as professional business advice and assistance. Some will even invest money into select startups, the article says. Across the country, there are about 1,200 incubators.

Different incubators focus on different industries and most will require the business owner to send in an application and be interviewed. Do your homework and determine which incubator might best suit your needs.

3. Here are ways to minimize the impact of divorce on your small business. Divorce is rarely easy, both in terms of financial and emotional effects the parties are subject to, but when one or both of the parties are business owners, the event could have a major impact on the business itself, particularly if there aren't agreements put in place ahead of time, Fox Business says.

The business is likely to be a part of the agreement for the distribution of assets in a divorce and likely subject to financial scrutiny and lost productivity as the business owner and possibly employees are taken away from daily tasks to gather information for the valuation. In a worst-case scenario, the business could even be sold in order to "pay the non-owner spouse his or her share of the business," the Fox article says, offering ways to avoid the impact of a divorce on the business.

First, if it's not obvious get legal counsel and one that has extensive experience with both personal and business aspects in divorce settlements.

However, before it even gets to the point of needing a lawyer, make sure that a prenuptial agreement or postnuptial agreement is created to predetermine asset distribution to protect the business. Beyond that, if there are multiple partners in the business, documents should be drawn up ahead of time to address a buyout or valuation if a divorce is filed, the article says.

If neither of these agreements exist, hire a joint financial expert to value the business, which could help streamline the process and keep costs down. You may want to enter into a confidentiality agreement to protect sensitive information, the article advises.

-- Written by Laurie Kulikowski in New York.

To contact Laurie Kulikowski, send an email to: Laurie.Kulikowski@thestreet.com.

To follow Laurie Kulikowski on Twitter, go to: http://twitter.com/#!/LKulikowski

>To submit a news tip, email: tips@thestreet.com.

RELATED STORIES:







Follow TheStreet on Twitter and become a fan on Facebook.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs