How often have you seen this at local businesses? Ever wonder why? If you think about it hard enough you can probably figure it out, but I'll save you the effort.
See, merchant accounts come with a fee. Those are the accounts that allow merchants to accept credit cards. Every retailer that has one must pay a percentage of the purchase price (called a discount rate) and a hard fee or a per transaction fee (or settlement or whatever other "title" each individual provider calls it). In short, every time you swipe your card at any retailer, about 15 people or entities are making money. Pennies at a time albeit, but still, that many people. There's the guy that sold the account into the retailer, the bank that underwrites the transaction, the account that settles it, the equipment company, etc... you get the point.
Some local businesses don't even accept credit cards, although that has gotten few and far between because they need to compete. I see customers these days swipe their card for a $1.03 coffee at Wawa. Why is Wawa accepting credit cards for a coffee when you can't charge a medium pie at Joe's? Well because Wawa sells a billion dollars worth of coffee a year. Joe, not so much. And every little penny eats into Joe's right to make a profit.
Then there is debit card purchases. Ever notice that most local places will almost beg you to enter a pin when using your atm card? Reason for that is they pay LESS when a pin is entered. Considerably less. Used to be as little as a quarter although today I would think its gone up to at least $-0.75 per. Just a guess, but certainly no discount rate.
Now, let's not get into the debate of whether or not people should be using credit cards for purchases as little as $10 (or $1). This isn't about debt or responsible money management. If the Fed has their way, cash will be gone as soon as yesterday.
So where am I going with this?... Oh that's right... A little bill that not too many people know about. Passed sometime in 2010 this bill, or amendment to the bill puts the burden of those expenses back onto the consumer. That's right folks. You will now be paying for it. And don't think this benefits the local businesses. They don't do enough in sales to really make that much of a difference. It's the Large retailers, the Walmarts, the Home Depots, The Safeway Super markets who will benefit in retaining billions of dollars in fees that YOU will now be paying for with the passing of this amendment.
What was called the Durbin amendment was introduced and passed the floor in 2010. Check out what I'm talking about here.... This also goes far beyond who pays for fees. This will class consumers. This is what the thought of Big Brother was really about. You will be required to keep extra money in your account to guarantee purchases. Debit card purchases could be limited based on your desire to pay those fees. The type of information and how it will be used will be affected, basically rendering everyone a walking marketing survey with every purchase. You want companies knowing how many diapers you purchase? How about cigarettes? Think that someone along the line would like to raise your health insurance premiums because they can see how many cartons of cigarettes you purchased, or bottles of Jamesons?
I think it's time we stop getting ridiculous about big business in this country because they are the ones who pay for the political clout. After all, this is what it's about. Politicians are people. they do what they need to do to keep their job. If that's voting in favor of a rule that benefits a corporation who spends thousands, or even millions on campaign funding to help that politician keep his job, that's what he's going to do. Really, it's not rocket science.
A bill of this nature is only going to add to the destruction of the middle class. Peruse the link I set forth above. Read the other news stories about it via the links on the home page. And get angry! This is serious stuff. It's not only going to add more costs onto the American public, but it's going to add more rules, more restrictions, and more, ahem* control.
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Tele-Aide Provides Peace of Mind
Every once in a while, someone comes up with an idea that just blows my socks off. Tele-Aide is one of those ideas. The founder, Greg Firely contacted me via email about doing a quick write up on his business and I glanced over it and the other 10 I received that day without very much attention.
After catching up with Greg on the phone and talking about his product, I am really excited about it and how much help it will provide the community. It is truly unique and offers families peace of mind for their loved ones as well as themselves. Read on...
Tele-Aide was a concept born out of experience and resulting in a necessity for families to really keep an eye on their loved ones. Almost everyone has someone close to them who may be older, sick, and/or lives alone. Some may even be far enough away where daily visits are impossible, and let's face it, in today's world, daily calls are even a stretch. Families find themselves with a need for checking up on their loved ones who may need daily contact to be sure that they are safe and well.
Tele-Aide answers that need. For a relatively small fee, Tele-Aide will contact your loved ones on a daily basis making sure they are well, have taken their medicine, if they are in need of any help, or if they are generally in good shape. Tele-Aide also provides reports to the relatives on any and all activity with calls that were made, what type of activity took place during those calls, and emergency calls to family if anything should be urgent.
Once they get a client, they start a profile on the patient. That profile includes things like the nearest emergency room, first responders, etc. so that if anything is to happen, or if the patient is in need of immediate help, they can respond with the fastest course of action. It also includes a health assessment from an RN for the patient to ensure that calls will include important information.
Tele-aide is an outbound service only. Meaning, they will make the contact to the patient on a daily basis with procedures in place, usually defined with the help of the family, specific to that patient. The patient doesn't have to check in at all. All calls are made directly from Tele-Aide. If there is no response on the first call, they may wait 20 minutes to make a second attempt. If no answer they may wait another 20 and then put into action a call for help by local authorities and contact family.
Calls will be made based off of family needs. Perhaps the patient may be out a specific time during doctor visits, or a bridge league. All calls will be made to ensure the highest level of safety is reached as it pertains to each individual patient.
With families moving farther and farther away, this service is invaluable and may even pay for itself. Cheaper than the gas someone might spend making multiple visits a month, you get the peace of mind of knowing your family member is being contacted every day to ensure their safety.
I've never heard of a service like this and believe it to be the first of its kind, although I haven't researched enough to verify it. A company like this, especially being a local company, is invaluable to the community. It has the potential to provide numerous jobs and be a real asset to the community, keeping its residents safe and their families comfortable knowing that there is someone there to keep an eye on them.
After catching up with Greg on the phone and talking about his product, I am really excited about it and how much help it will provide the community. It is truly unique and offers families peace of mind for their loved ones as well as themselves. Read on...
Tele-Aide was a concept born out of experience and resulting in a necessity for families to really keep an eye on their loved ones. Almost everyone has someone close to them who may be older, sick, and/or lives alone. Some may even be far enough away where daily visits are impossible, and let's face it, in today's world, daily calls are even a stretch. Families find themselves with a need for checking up on their loved ones who may need daily contact to be sure that they are safe and well.
Tele-Aide answers that need. For a relatively small fee, Tele-Aide will contact your loved ones on a daily basis making sure they are well, have taken their medicine, if they are in need of any help, or if they are generally in good shape. Tele-Aide also provides reports to the relatives on any and all activity with calls that were made, what type of activity took place during those calls, and emergency calls to family if anything should be urgent.
Once they get a client, they start a profile on the patient. That profile includes things like the nearest emergency room, first responders, etc. so that if anything is to happen, or if the patient is in need of immediate help, they can respond with the fastest course of action. It also includes a health assessment from an RN for the patient to ensure that calls will include important information.
Tele-aide is an outbound service only. Meaning, they will make the contact to the patient on a daily basis with procedures in place, usually defined with the help of the family, specific to that patient. The patient doesn't have to check in at all. All calls are made directly from Tele-Aide. If there is no response on the first call, they may wait 20 minutes to make a second attempt. If no answer they may wait another 20 and then put into action a call for help by local authorities and contact family.
Calls will be made based off of family needs. Perhaps the patient may be out a specific time during doctor visits, or a bridge league. All calls will be made to ensure the highest level of safety is reached as it pertains to each individual patient.
With families moving farther and farther away, this service is invaluable and may even pay for itself. Cheaper than the gas someone might spend making multiple visits a month, you get the peace of mind of knowing your family member is being contacted every day to ensure their safety.
I've never heard of a service like this and believe it to be the first of its kind, although I haven't researched enough to verify it. A company like this, especially being a local company, is invaluable to the community. It has the potential to provide numerous jobs and be a real asset to the community, keeping its residents safe and their families comfortable knowing that there is someone there to keep an eye on them.
Other Avenues to Get Capital for Small Business
If I hear it one time a week I hear it ten times (well maybe an overstatement there) but anyway I hear it weekly. And if you work in the business development/economic development field of helping small business owners and future owners then you do to. There is simply no way around it - you are going to hear it. What is it you ask? The statements "No bank is willing to lend to me." or "I can't find anyone willing to give me the money."
I admit we would think with the current talk of small business being the true savior of our economic recession that banks would be more willing to lend. But they are not. In fact, it seems they have tightened up thier lending criteria even more. I understand they are nervous with the mortage crisis but to help us get out of it, lend some instead of letting it sit in the bank.
When I work with a client and we determine the need for capital, I always recommend they start with the local banking system in their community. That sounds like I am talking out of both sides of my mouth but I have a reason for it. I feel this is important to help them start to establish a relationship with their business banking partner. At sometime they will need that partner and at sometime that partner will be willing to lend to them - so get to know each other early in the process.
Clients may not meet the lending criteria due to credit scores, past mistakes, poor or no business plans or do not present well during the bank interview. If after they have shopped the local banks and they have gotten a solid goose egg, then it is time to go to the second tier of lendors I use at my center. But it needs to be said, banks are still lending - they have not stopped totally lending. I am still getting clients funded through bank loans. In fact, this year has been better for me than the last two years. So I really think the secret is the connection you and that potential banker make during the initial interview.
The second tier is made up of organizations like community development corporations, regional planning organziations, economic development organizations and special business groups like downtown redevelopment entities. Here they want to help the local entrepreneur and often do by filling a gap in the financing or taking on the whole deal if they can afford it. So I talk to my clients and give them the listing of area opportunities and they go shopping again. I tell them this may not be as fruitful as my other lower tiers but they often know of opportunities that may exist to help. While I have not had much luck in getting clients funded here, I have found many other resources out there to help with more exact funding opportunities than I ever knew exixted in the area.
If that one goes bust, then we move on down the ladder to tier three - non traditional lendors. Here many people may argue my placement but since I am writing I am deciding the placement. My center is a member of a few national lending networks where I take the client and post their application on the website. Just like in LendingTree, banks from all over the county review the package and then place their offers/questions for us to review and respond. So the client and myself reveiw the offers and make a decision if to take the deal or not. Of course, it is not that simple of a decision or process but we all know that. As for my center, I have posted many deals, gotten bites from out of and in state banks but the clients have all gotten cold feet at the prospect of dealing with a banker they will never meet.
In this tier also is alternative banks who are national in scope but do not act like a traditional bank. They offer programs for specfic industries or categories of the populations (i.e. Veterans, women, etc.). I always make a point to check on them to see if there is any programs my client may qualify for.
The fourth tier is the true non-traditional lendor - funding sources that are willing to take the risk and the client pays the higher price. Nothing wrong here at all, just sometimes the interest rate these companies charge are more like a credit card than a financial source. I am currently working with a client who is in a situation where he has no way to go but to this level - no collateral that is not already spoken for, no capital, in the red but yet is so close to the breakeven point. We have submitted the proposal to the cash flow lender and will see what happens. I make my clients aware of these lendors when we have to since their interest rate is higher and often the client can't receive the full amount they really need to move the needle.
The fifth tier is venture capital/angel firms. Yes even here in Southeast Missouri there are such firms. Now admittingly, this tier may come up sooner depending on the needs of the client. I currently have three clients working with VC firms. I was surprised to learn they often do not operate the way you are told. I prepped my clients for the three minute presentation, helped them create handouts, got the financials ready and even rehearsed. When we went to the meeting, they just wanted to talk to us about the product, the client, why the money and what they hoped to achieve with it. Personally I loved it because it was so relaxed and my clients could handle it. In fact, they went in over prepared with my prep work but yet they answered all the questions dead on.
My final tier is personal capital - credit cards, the 3F plan (friends, family or fools) or P2P opportunities. Now again, this opportunity may come up sooner depending on the situation presented to the client. But I know of several businesses who maxed out one card only to pay it off while maxing out another. Yes high interest but when that is what you have you use it.
I usually get a chuckle at the 3F plan but it is a serious opportunity but one that comes at great risk - the loss of a friendship/relationship. We have all heard of family members not speaking to each other because of a deal gone south. That does not make for a fun Thanksgiving dinner around the family table.
With the P2P (peer to peer), you can go to websites and pitch your idea and people will decide how much they want to give. I have not had any clients go this route yet but a few have looked at it since they were considering a home based business and did not need a large amount. I understand it to be safe and sound for both parties since the money is managed by a third party.
Well just know aspiring entrepreneur, there are many other avenues to the cash you need besides the local bank. Don't give up - just come see me and we will get you started.
Any thoughts or discussion. Where would you place your lending community opportunities in the scale. Let me know and let's talk.
I admit we would think with the current talk of small business being the true savior of our economic recession that banks would be more willing to lend. But they are not. In fact, it seems they have tightened up thier lending criteria even more. I understand they are nervous with the mortage crisis but to help us get out of it, lend some instead of letting it sit in the bank.
When I work with a client and we determine the need for capital, I always recommend they start with the local banking system in their community. That sounds like I am talking out of both sides of my mouth but I have a reason for it. I feel this is important to help them start to establish a relationship with their business banking partner. At sometime they will need that partner and at sometime that partner will be willing to lend to them - so get to know each other early in the process.
Clients may not meet the lending criteria due to credit scores, past mistakes, poor or no business plans or do not present well during the bank interview. If after they have shopped the local banks and they have gotten a solid goose egg, then it is time to go to the second tier of lendors I use at my center. But it needs to be said, banks are still lending - they have not stopped totally lending. I am still getting clients funded through bank loans. In fact, this year has been better for me than the last two years. So I really think the secret is the connection you and that potential banker make during the initial interview.
The second tier is made up of organizations like community development corporations, regional planning organziations, economic development organizations and special business groups like downtown redevelopment entities. Here they want to help the local entrepreneur and often do by filling a gap in the financing or taking on the whole deal if they can afford it. So I talk to my clients and give them the listing of area opportunities and they go shopping again. I tell them this may not be as fruitful as my other lower tiers but they often know of opportunities that may exist to help. While I have not had much luck in getting clients funded here, I have found many other resources out there to help with more exact funding opportunities than I ever knew exixted in the area.
If that one goes bust, then we move on down the ladder to tier three - non traditional lendors. Here many people may argue my placement but since I am writing I am deciding the placement. My center is a member of a few national lending networks where I take the client and post their application on the website. Just like in LendingTree, banks from all over the county review the package and then place their offers/questions for us to review and respond. So the client and myself reveiw the offers and make a decision if to take the deal or not. Of course, it is not that simple of a decision or process but we all know that. As for my center, I have posted many deals, gotten bites from out of and in state banks but the clients have all gotten cold feet at the prospect of dealing with a banker they will never meet.
In this tier also is alternative banks who are national in scope but do not act like a traditional bank. They offer programs for specfic industries or categories of the populations (i.e. Veterans, women, etc.). I always make a point to check on them to see if there is any programs my client may qualify for.
The fourth tier is the true non-traditional lendor - funding sources that are willing to take the risk and the client pays the higher price. Nothing wrong here at all, just sometimes the interest rate these companies charge are more like a credit card than a financial source. I am currently working with a client who is in a situation where he has no way to go but to this level - no collateral that is not already spoken for, no capital, in the red but yet is so close to the breakeven point. We have submitted the proposal to the cash flow lender and will see what happens. I make my clients aware of these lendors when we have to since their interest rate is higher and often the client can't receive the full amount they really need to move the needle.
The fifth tier is venture capital/angel firms. Yes even here in Southeast Missouri there are such firms. Now admittingly, this tier may come up sooner depending on the needs of the client. I currently have three clients working with VC firms. I was surprised to learn they often do not operate the way you are told. I prepped my clients for the three minute presentation, helped them create handouts, got the financials ready and even rehearsed. When we went to the meeting, they just wanted to talk to us about the product, the client, why the money and what they hoped to achieve with it. Personally I loved it because it was so relaxed and my clients could handle it. In fact, they went in over prepared with my prep work but yet they answered all the questions dead on.
My final tier is personal capital - credit cards, the 3F plan (friends, family or fools) or P2P opportunities. Now again, this opportunity may come up sooner depending on the situation presented to the client. But I know of several businesses who maxed out one card only to pay it off while maxing out another. Yes high interest but when that is what you have you use it.
I usually get a chuckle at the 3F plan but it is a serious opportunity but one that comes at great risk - the loss of a friendship/relationship. We have all heard of family members not speaking to each other because of a deal gone south. That does not make for a fun Thanksgiving dinner around the family table.
With the P2P (peer to peer), you can go to websites and pitch your idea and people will decide how much they want to give. I have not had any clients go this route yet but a few have looked at it since they were considering a home based business and did not need a large amount. I understand it to be safe and sound for both parties since the money is managed by a third party.
Well just know aspiring entrepreneur, there are many other avenues to the cash you need besides the local bank. Don't give up - just come see me and we will get you started.
Any thoughts or discussion. Where would you place your lending community opportunities in the scale. Let me know and let's talk.
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