According to the Los Angeles Times, the U.S. government paid small firms $96.8 billion in contracts last year. This is an increase from 2008’s award of $93.2 billion in small business contracts. The government paid small businesses for defense work, scientific research, technological support and janitorial services. The Small Business Administration (SBA) reports that the increase still fell short of Congress’ goal to set aside 23% of its spending for contracts (contract spending for 2009 amounted to 21.89%). SBA Administrator Karen Mills notes that the figures indicate real progress, but that it is not enough, since government contracts with small businesses create jobs. Despite the figures many small businesses believe that large companies have an advantage when it comes to winning large government contracts, leaving less work for small businesses. The federal government is required to track its contracting efforts with women-, minority-, and disabled veteran-owned small business and business in economically distressed areas. Last year, contracts to women and disabled vets failed to meet the 5% and 3% goals, respectively, while contracts to minority-owned small business exceeded the 5% goal by 2.57%. Despite the shortfalls, government contracts increased among all underrepresented populations from a year ago. Small business in disadvantaged areas saw an increase from $10.1 billion in 2008 to $12.4 billion in 2009.

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The Miami Herald’s Barry Sharpe offers small business owners advice on cutting business expenses and saving money. First, Sharpe suggests looking at your property insurance to determine whether you are over insured. Fire, accident, theft, natural disasters are normally included under your insurance coverage; but often times business owners elect to cover office equipment as well. This can be very expensive and in certain cases, unnecessary. Critical items, like computers and phones, should not be removed; but outdated, inefficient machines and equipment should be to reduce your insurance premiums. Rent is another large expense for small firms, but Sharpe notes that in today’s market, prices are negotiable. Sharpe suggests finding out comparable rates for vacant office rentals in your area and using that to negotiate with your landlord for a reduction. If they are unwilling to reduce the rent, Sharpe warns that you should be prepared to move. In the long run, you will save thousands of dollars, despite the moving expenses. Lastly, Sharpe suggests that if you pay property taxes on any real estate owned by your business, you should file a tax appeal with the county. You may be entitled to a significant refund if the county determines that the value of your property is over-assessed. You will have to find comparable sales of nearby properties in order to determine your right to a refund.

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Crain’s Brigid Sweeney reports on a Chicago restaurateur’s business expansion to an area lacking food options. Quentin Love owns the Quench chain of healthy fast-food restaurants in the city’s South and West sides. Love recently expanded his chain to include Fresh Family Foods grocery store in the Chatham neighborhood at 336 East 95th. The store offers fresh produce, meats, a juice and smoothie bar, and Quench restaurant menu items. The store does not sell cigarettes or alcohol. “I like going to Whole Foods and Trader Joe’s, so we decided to bring the concept of a quaint, urban grocery boutique to the South Side,” said Love. The area currently lacks fresh food choices and convenient stores, offering overpriced prepackaged items, drastically outnumber the one Jewel grocery store in the area. Love touts his new venture as the only black-owned grocery in the state and it opens as other companies, including Walgreens and Wal-Mart, have begun addressing Chicago’s food deserts issue. Like, Fresh Family Foods, large corporations will begin selling fresh fruits and vegetables at there South and West side locations.

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The city of Chicago will infuse an additional $2.15 million in grants into its Small Business Development Loan Program. The grants will go to the city’s five new lending partners. In addition, the city will lower the program’s minimum loan amount from $10,000 to $2,000 after learning that many businesses were in need of much smaller loan amounts. City Treasurer Stephanie Neely notes that, “this is an overlooked segment of the market, and we want to make sure that small businesses have access to affordable capital just like bigger companies.” The $750,000 pilot program was launched last year with the help of Accion Chicago (Accion), a nonprofit small business lender. Thus far, the program in partnership with Accion has made 23 loans totaling $230,000. Neely adds that the loans saved 100 jobs and that all borrowers are current on their loan payments. The programs expansion is welcomed news as small businesses continue to have difficulty obtaining credit through the banks. Kathleen Cummings, the owner of a child care center, was unable to secure a loan from a bank, but through the city’s loan program she received $10,000 to expand her business. To ensure that the new lending partners use the grants for loans, Neely is requiring each partner to lend half of their grant money within the next year and the other half within two years. “This is taxpayer money and we have to be good stewards of it, but if we can’t revitalize our small business community, if we can’t provide them with access to capital, we’re in trouble, because big banks aren’t lending to them,” says Neely.

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The Wall Street Journal reports that the American Recovery Capital program (ARC) will expire at the end of the month. The program was launched last year as part of the stimulus bill to help address small business capital needs. The intent of the program was to help 10,000 small businesses survive short-term financial hardship by offering interest free loans of up to $35,000 to help pay down debts. As of August 20th, only 8,281 ARC loans have been approved by the Small Business Administration (SBA). The program has fallen short of its goal by over 1,000 businesses, but the SBA still considers the initiative effective. “Almost 8,300 businesses got breathing room in the recession to keep their doors open and employees working,” said Jonathan Swain, a spokesman for the SBA. According to The Wall Street Journal, the shortfall may be due to some banks unwillingness to issue and administer the loans. The small loan amounts are not very profitable for banks, given the amount of paperwork involved to process them. Also, the program had high hurdle rates for businesses, requiring applicants to show evidence of past profitability and a plan for how they will meet loan eligibility requirements in the future.

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The Chicago Tribune’s Gail Marks Jarvis examines why small businesses are not hiring. According to Jarvis, the impact of the November elections and recent healthcare reform has often been blamed for employer unwillingness to hire. She points to a much more tangible culprit. “Unless companies see customers showing up in greater numbers, hiring is not going to materialize,” says JPMorgan Securities economist Gabriel de Kock. And adds, “a shift in the balance of power after the November congressional elections will have a very modest sustained positive impact on economic growth and job creation, unless such a shift drives policy change that directly boosts aggregate demand.” de Kock analyzed over 37 years of survey data about small business owners to determine if taxes and political factors carried significant weight in their hiring decisions. According to his analysis, entrepreneurs overwhelmingly indicated that weak consumer demand, and not government policies, were the principal drivers behind their reluctance to invest in expansion. Jacques Eady, a Heartland Payment Systems manager who advises restaurant owners and other small businesses, said “what stops business from hiring is sales. If they think they can move to the next level and get more business by hiring, they will do it.” Ashley Bolivar, owner of Magnetic Marketing Solutions, “was scared to death to hire help in this economy,” but thinks recent new business will support the hiring of his first two employees.

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One of the biggest obstacles for a start-up is finding capital. As an alternative to borrowing money, a small business owner can turn to the government for a grant. It may take some work to find small business grants, but the payoff will be worth the effort. Free money for your small business. The Federal government only offers small business grants to nonprofit organizations and educational institutions. If your small business falls outside of the federal coverage area, you can turn to your local state agency to find a grant. You will have to locate the state agency that covers local businesses through your state’s official government website. This may not be an easy task, so begin with a search for your state’s economic development department, financial assistance department, or the tax and revenue department. An internet search can also yield information on small business grants. A great place to start is the Small Business Administration’s (SBA) website, www.business.gov. The site allows small business owners to narrow their search to grants that they are eligible to apply for. Small business financing is not always free; some can require an individual to match funds. Do not get discouraged if you are unable to find a grant for your business. The SBA also offers a wide range of services and resources to help with obtaining low interest loans.

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The Small Business Administration, Bank of America and the Initiative for a Competitive Inner City have partnered to help small business owners in underfunded urban areas access capital. Their Inner City Capital Connection program will offer inner-city small businesses a chance to meet with potential lenders at events in New York, on October 12th, and Los Angeles, on November 15th-16th. The events will match qualified business owners with banks, asset-based lenders, venture capitalists, private equity firms, merchant banks and angel investors. “Our goal is to choose 100 inner-city businesses this year,” said Hyacinth Vassell, program manager for event. A business is eligible to participate if it is headquartered in an economically distressed urban area or has at least 51 percent of its physical operation there. The company must also be a for-profit corporation, partnership or sole proprietorship with $2 million or more in revenues for 2009. To be considered for the program, a company must first complete this nomination form.

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According to a recent press release, the Illinois Small Business Job Creation Tax Credit may allow small businesses to take advantage of a tax credit for new hires. The $2,500 tax credit will be for new jobs created between July 1, 2010 and June 30, 2011. “If a business is deciding whether to hire today or wait, we hope this tax credit gives them the boost they need to hire right now and expand,” said Governor Quinn. “We must continue doing everything we can to build our economy, and this is an innovative way to put thousands of people to work across Illinois.” To qualify for the tax credit, a business must have 50 or fewer employees as of June 30, 2010 (95 percent of Illinois small businesses have less than 50 employees). Eligible businesses should register new, full-time positions as soon as an Illinois employee is hired and begins work. After one year, the employer can apply for their tax credit certificate. Certificates will be awarded beginning July 1, 2011; with a cap of $50 million to support 20,000 jobs. For more on eligibility requirements for the tax credit, and to register a new position, click here.

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Reuters reports that for the first time in more than two years, U.S. commercial real estate prices posted a quarterly gain of 2.2 percent. According to the Investment Property Databank US Quarterly Property Index (IPD), between the first quarters of 2008 and 2010 the average commercial property price declined by a third of its value. Prior to the onset of the recession, commercial property values experienced five years of appreciation. The index complier is quick to point out that the news may not be a sign of things to come, as the economic outlook remains mixed. “The return to capital appreciation could be a brief one, with the economic picture worsening again,” Simon Fairchild, Managing Director at IPD North America, said. “If this does prove to be a brief respite before further unwinding, investors will need to be prepared for setbacks with increased volatility in the performance of their investments.”

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