45 Seaman Avenue
Bethpage, New York 11714
866 433-5432
Bethpage, New York 11714
866 433-5432
Money and Technical Assistance for Small Businesses and Not-For-Profits Since 1980
The President's Blog
Roslyn D. Goldmacher, Esq. is the President/CEO & Founder of the Long Island Development Corporation family of economic development entities which includes the Greater New York Development Co. serving small businesses and not-for-profits for almost thirty years with low cost financing and free technical assistance. Roslyn (Roz) is a well known authority on small business, financing, and economic development. She serves on several national Boards of Directors including the national fiscal agent for the SBA 504 loan program and the national Service Corps Of Retired Executives (SCORE). Roz has been honored by multiple US Presidents, Congress, NYS Governors, and others for her economic development, community development, business & philanthropic work. She writes monthly columns for the NY Real Estate Journal and Networking Magazine. In LIDC's President's Blog, Roz will share her expertise and experience at helping businesses and not-for-profits in order to improve our communities. Blog articles will cover such diverse topics as financing for capital projects to how to use golf as a networking tool. At anytime feel free to respond to the Blog by e-mailing Roz.
The sub prime residential mortgage market upheavals have caused the banks to start tightening credit standards, not just in the residential world but in the commercial world as well. The regulators are not far behind and we all know that 'fixes' for problems in the residential arena are quick to spill over into our world. So, let's be prepared and know the alternatives for our commercial deals. The SBA 504, New Market and JDA subordinate financing programs are wonderful tools to supplement the shrinking conventional mortgage money. Here's how they work:
SBA 504: for small businesses only (for profit entities; net profit after taxes of $2.5 million or less; tangible net worth of $7.5 million or less). For land/building acquisition, renovation, construction, condominium, coop, machinery, commercial vessel. Add up the total project cost (acquisition, renovation, construction plus soft costs such as appraisal, environmental, title insurance, accounting, legal, permits, etc.). A bank or other conventional lender lends 50% and takes a first lien on the project. The SBA 504 loan provides 40% and takes a second lien on the project. The buyer provides 10% (extra 5% if start up or special purpose building). Maximum SBA 504 loan is $4 million for manufacturers, $2.0 million for women, minority, economic development zone, exporters, $1.5 million for others. The 504 loan is for 10 or 20 years at a fixed rate based on 10 year treasury. 504 loans are available from certified development companies licensed by SBA. The oldest and most respected CDC in the tri-state area is Long Island Development Corporation/Greater NY Development Co. at www.lidc.org.
New Market Loan Fund: for small businesses (same standard as SBA but more flexible) and not-for-profit entities. Capital acquisition, construction, renovations and refinancing (latter only if money from refinancing is used for the operations). A conventional lender lends 50% of total project cost in first lien position. The New Market Fund lends 40% in second lien position (except on refinancing New Market can lend up to 100%). Fixed rate 25 years based on 7 and 10 year treasury rates. Maximum loan is $2.5 million (can go higher for certain projects). Can be combined with SBA 504 and other government subordinate loan programs. Available from LIDC/GNYDC at www.lidc.org.
New York Job Development Authority: for small businesses (less than 500 employees) in NYS; for land, building (including construction), renovations; lends 40% behind conventional lender's 50%. Strict job creation requirements. Fixed and floating rates available. Maximum loan $2.5 million. Available from NYS - www.empire.state.ny.us.
All three funds can be combined for the right project with or without a conventional lender. New Market is the most flexible of the programs. So, when you're working on that next commercial real estate deal, keep these loan programs in mind to provide low cost, affordable financing.
SBA 504: for small businesses only (for profit entities; net profit after taxes of $2.5 million or less; tangible net worth of $7.5 million or less). For land/building acquisition, renovation, construction, condominium, coop, machinery, commercial vessel. Add up the total project cost (acquisition, renovation, construction plus soft costs such as appraisal, environmental, title insurance, accounting, legal, permits, etc.). A bank or other conventional lender lends 50% and takes a first lien on the project. The SBA 504 loan provides 40% and takes a second lien on the project. The buyer provides 10% (extra 5% if start up or special purpose building). Maximum SBA 504 loan is $4 million for manufacturers, $2.0 million for women, minority, economic development zone, exporters, $1.5 million for others. The 504 loan is for 10 or 20 years at a fixed rate based on 10 year treasury. 504 loans are available from certified development companies licensed by SBA. The oldest and most respected CDC in the tri-state area is Long Island Development Corporation/Greater NY Development Co. at www.lidc.org.
New Market Loan Fund: for small businesses (same standard as SBA but more flexible) and not-for-profit entities. Capital acquisition, construction, renovations and refinancing (latter only if money from refinancing is used for the operations). A conventional lender lends 50% of total project cost in first lien position. The New Market Fund lends 40% in second lien position (except on refinancing New Market can lend up to 100%). Fixed rate 25 years based on 7 and 10 year treasury rates. Maximum loan is $2.5 million (can go higher for certain projects). Can be combined with SBA 504 and other government subordinate loan programs. Available from LIDC/GNYDC at www.lidc.org.
New York Job Development Authority: for small businesses (less than 500 employees) in NYS; for land, building (including construction), renovations; lends 40% behind conventional lender's 50%. Strict job creation requirements. Fixed and floating rates available. Maximum loan $2.5 million. Available from NYS - www.empire.state.ny.us.
All three funds can be combined for the right project with or without a conventional lender. New Market is the most flexible of the programs. So, when you're working on that next commercial real estate deal, keep these loan programs in mind to provide low cost, affordable financing.
July 2008
Low Cost Financing for Your Business or Nonprofit Deals
August 2008
Using Golf as a Sales Tool
Those who know me will wonder how I could possibly be qualified to talk about golf as a sales tool. I am not known for my golfing prowess. Having said that, I am an award winning golfer: twice I have won the " Broken Club Award" awarded by the LI Business Development Council (LIBDC). On a third occasion I was in the foursome that won the "Broken Club Award." I have since given up playing in the LIBDC tournament so as to give others a chance at the award. On my shelf sits a beautiful bronze statue for "Closest to the Pin" awarded by Advancement for Commerce Industry & Technology (ACIT). I received that award by going to the Executive Director at the end of the awards presentation and complaining that ACIT didn't give out any awards achievable by players like myself- awards like "shortest drive," "furthest from the pin," "cleanest balls" (I stop at every ball cleaner to clean my golf balls). The director responded by bringing me the bronze award statue saying- "here, this is an extra- you can have it."
In addition to being an award winning golfer, I look the part. I have a Masters Golf Bag, towels and covers. I won it at a conference. People started offering me money for the bag. I asked the guy sitting next to me why. He responded- "don't you understand- it's a Masters Golf Bag, sold only during the Masters tournament, on course." I said "great- what's the Masters?"
The stories go on and on- there's the time my fellow golfer took the pin from Hole 1 and put it in her golf bag. When questioned her response was " I think you have to take the flag from each hold to prove you played the hole." I knew enough to put it back- I had taken a golf etiquette course. And, of course, there's the time Christine Sheahan (esteemed published of NN) and I played together and accidentally drove the golf cart into a tree. One of my favorites was when I conducted a golf tournament for my company- Long Island Development Corporation/Greater New York Development Company- the SBA 504 long term, low fixed rate, low downpayment second mortgage loan program for small businesses buying buildings in NYS. I insisted we all wear our matching LIDC yellow golf shirts. Little did I know that yellow attracts bees. At least I was able to see where my players were on the course (as they fled the bees).
All of this demonstrates my lack of golfing ability. Nevertheless- it hasn't impacted my ability to use golf as a sales tool for my business. Since a golf game typically takes several hours (although I usually play faster- I pick up at double par), it's a wonderful opportunity to build relationships with the other players. The key is putting together the right foursome. For me, the best foursome consists of bankers, real estate brokers, lawyers and accountants. These are the intermediaries I am trying to reach to talk about the SBA 504 loan program because- when a small business wants to buy a building-he or she goes to one of these intermediaries. Playing a round of golf, building the relationship, having time to talk about my loan program - is a great way to sell my product.
So, whether you're the best of golfers, award winning (like me), or just thinking of trying the game- consider golf as a sales tool for your business. It will help you develop relationships, sell your products and (hopefully) most of all- have fun while doing business!
In addition to being an award winning golfer, I look the part. I have a Masters Golf Bag, towels and covers. I won it at a conference. People started offering me money for the bag. I asked the guy sitting next to me why. He responded- "don't you understand- it's a Masters Golf Bag, sold only during the Masters tournament, on course." I said "great- what's the Masters?"
The stories go on and on- there's the time my fellow golfer took the pin from Hole 1 and put it in her golf bag. When questioned her response was " I think you have to take the flag from each hold to prove you played the hole." I knew enough to put it back- I had taken a golf etiquette course. And, of course, there's the time Christine Sheahan (esteemed published of NN) and I played together and accidentally drove the golf cart into a tree. One of my favorites was when I conducted a golf tournament for my company- Long Island Development Corporation/Greater New York Development Company- the SBA 504 long term, low fixed rate, low downpayment second mortgage loan program for small businesses buying buildings in NYS. I insisted we all wear our matching LIDC yellow golf shirts. Little did I know that yellow attracts bees. At least I was able to see where my players were on the course (as they fled the bees).
All of this demonstrates my lack of golfing ability. Nevertheless- it hasn't impacted my ability to use golf as a sales tool for my business. Since a golf game typically takes several hours (although I usually play faster- I pick up at double par), it's a wonderful opportunity to build relationships with the other players. The key is putting together the right foursome. For me, the best foursome consists of bankers, real estate brokers, lawyers and accountants. These are the intermediaries I am trying to reach to talk about the SBA 504 loan program because- when a small business wants to buy a building-he or she goes to one of these intermediaries. Playing a round of golf, building the relationship, having time to talk about my loan program - is a great way to sell my product.
So, whether you're the best of golfers, award winning (like me), or just thinking of trying the game- consider golf as a sales tool for your business. It will help you develop relationships, sell your products and (hopefully) most of all- have fun while doing business!
September 2008
Rules for Maximizing and Surviving the Lunch, Munch and Brunch Circuit
September marks the start (again) of the busy networking season. Business networking can be very productive for your business and/or very stressful for you. Networking groups, trade groups, business groups, charitable groups, civic groups, educational groups-all are in full gear with meetings every moment of the week. Networking can be beneficial for your business but if you are active in the networking scene, it can also be overwhelming and stressful for you. After many years on the "lunch,munch and brunch circuit" I have created the following rules for myself to help me decide how to spend my time effectively in networking. I hope you will find them helpful in managing your networking time:
First, assess the group before you assess the event. Is this a group which can provide potential meaningful sales leads? Can it provide resources to help you and your company improve the way you do business? Can it provide resources to help your clients? Is it a group which gets things done- has an impact in accordance with its mission? Does it provide a benefit to the community, you individually, or your company or clients? If you can't answer yes to any of these questions, then you should not waste your time on the group
Assuming you have answered yes to one or more of the questions about the group, now look at the event you're considering. First and foremost- is it at a convenient time for you? Nothing is more important than you and you always need to keep your needs as a priority. No amount of networking will provide benefit if you're overstressed, overwhelmed or unable to focus. If it is inconvenient, are the potential benefits so enormous that they outweigh all the problems? People need to trust you, be able to rely on you,etc. in order to use your products or services. Obtaining resources and advice from fellow networkers certainly works much faster but you don't want to be known as someone who takes and runs-for all the resources you take from a group and its members, you should also be known as someone who gives back.
Once at an event, maximize your time there. Make sure to network with people you don't know in addition to your friends and known colleagues. Follow some basic guidelines- wear a name tag (with big letters- we have an aging sight challenged population). Wear the name tag on your right shoulder. When someone goes to shake your hand, their line of sight automatically goes there. Have plenty of business cards. Stand in the bar or food lines and strike up a conversation with the person in front of you and the person behind you. Visit display tables and ask questions of the vendors. If you have the opportunity to speak or in other ways be the center of attention, take it…you can't sell to people or receive resources from them if they don't know about you. Speaking is a great way to get everyone in the room to recognize you.
Last, but certainly not least- will the group and/or its events be interesting and fun. Time is one of those life commodities which does not get replenished. Whether you are a business owner or work for someone else, your time is valuable- valuable to your company and valuable to you and your family. You don't get that time back!!! Enjoyment should be one of your top priorities in networking. And, its okay to be involved with a group or event that doesn't contribute a lot to your professional betterment-just because it is fun!
Remember, navigating the "lunch, munch and brunch scene" doesn't have to be an unrewarding marathon. Attend those events where you have a real interest in supporting the group/event or feel you can benefit personally or professionally from the time spent. Ultimately, successful networking is productive and you will be more productive if you have fun while you work!
First, assess the group before you assess the event. Is this a group which can provide potential meaningful sales leads? Can it provide resources to help you and your company improve the way you do business? Can it provide resources to help your clients? Is it a group which gets things done- has an impact in accordance with its mission? Does it provide a benefit to the community, you individually, or your company or clients? If you can't answer yes to any of these questions, then you should not waste your time on the group
Assuming you have answered yes to one or more of the questions about the group, now look at the event you're considering. First and foremost- is it at a convenient time for you? Nothing is more important than you and you always need to keep your needs as a priority. No amount of networking will provide benefit if you're overstressed, overwhelmed or unable to focus. If it is inconvenient, are the potential benefits so enormous that they outweigh all the problems? People need to trust you, be able to rely on you,etc. in order to use your products or services. Obtaining resources and advice from fellow networkers certainly works much faster but you don't want to be known as someone who takes and runs-for all the resources you take from a group and its members, you should also be known as someone who gives back.
Once at an event, maximize your time there. Make sure to network with people you don't know in addition to your friends and known colleagues. Follow some basic guidelines- wear a name tag (with big letters- we have an aging sight challenged population). Wear the name tag on your right shoulder. When someone goes to shake your hand, their line of sight automatically goes there. Have plenty of business cards. Stand in the bar or food lines and strike up a conversation with the person in front of you and the person behind you. Visit display tables and ask questions of the vendors. If you have the opportunity to speak or in other ways be the center of attention, take it…you can't sell to people or receive resources from them if they don't know about you. Speaking is a great way to get everyone in the room to recognize you.
Last, but certainly not least- will the group and/or its events be interesting and fun. Time is one of those life commodities which does not get replenished. Whether you are a business owner or work for someone else, your time is valuable- valuable to your company and valuable to you and your family. You don't get that time back!!! Enjoyment should be one of your top priorities in networking. And, its okay to be involved with a group or event that doesn't contribute a lot to your professional betterment-just because it is fun!
Remember, navigating the "lunch, munch and brunch scene" doesn't have to be an unrewarding marathon. Attend those events where you have a real interest in supporting the group/event or feel you can benefit personally or professionally from the time spent. Ultimately, successful networking is productive and you will be more productive if you have fun while you work!
Long Island Development Corporation Phone: 866 433-5432
45 Seaman Avenue Fax: 516 433-5046
Bethpage, New York 11714 Email: info@lidc.org
45 Seaman Avenue Fax: 516 433-5046
Bethpage, New York 11714 Email: info@lidc.org
Copyright 2008 LIDC Website by Mrs.Graphix
October 2008
Key Ingredients of Entrepreneurial Success
This is the season of self help books, lectures, late night television infomercials. Whether it involves selling a new face cream, a get rich quick real estate scheme or a book on government "grants", there are plenty of people out there hawking the secrets of success. What all these gurus say about the keys to success is easily translatable to key ingredients of entrepreneurial success. We all admire Bill Gates, the founders of Google, Walt Disney- all of whom built entrepreneurial empires- successful beyond any definition of success. What elements of business did they follow? Here are some:
A Dream With A Solid Base: The base needs to be the product or service. The dream includes the customer base. A great business needs a strong focal point- a major product or service needed and wanted by a target audience. You can invent the next great mouse trap- or you can improve the existing ones- or you can figure out ways to alternatively and creatively use the mouse traps. Diversity expands your ability and protects the business but even the most diverse successful businesses have a core expertise. Disney's is entertainment. Google's is information. Microsoft's is technology infrastructure. Find your base product or service, your best target customer, and always serve those focal points.
Planning: Dreams don't pay the rent. A successful business requires a realizable dream and the means to implement it. A business plan to start and expand your business is a key tool. It should be flexible enough to weather upturns and downturns, change with the times and the customer's needs. The most important thing is to commit the plan to paper (or disc) and periodically review it for relevance and to make sure you're following it.
Adequate capitalization: Show me the money! Too often, businesses fail because of lack of capital. When starting a business, one needs to look at more than the hard costs- at the carrying costs until such time as the money coming in the door exceeds the money going out. Capitalization can come from one's own personal resources, friends, relatives, loans, joint venture investments- whatever the source- it needs to be enough to allow you to deliver the promised product or service in the way that meets your market's needs.Capitalization also needs to be sufficient to cover the unanticipated as well as the anticipated costs.
Knowledge: Knowledge is a key element in business success. The most successful entrepreneurs take the time to learn everything about their business and always remember they need to keep learning. Successful business owners keep pursuing the knowledge necessary to run their business and keep it current.
Persistence: No one ever said it would be easy! Even the most successful entrepreneur has had his/her share of failures, frustrations, and challenges. The best entrepreneurs, however, work through it all and keep on going, even in the face of adversity. They stick to their dream, follow their plan (even if they have to tweak it), and find a way to survive the tough times.
An Invested Team: Successful entrepreneurs recognize they are not islands unto themselves. They surround themselves with capable people who care about the company and feel invested in its success. A good team can assist with all the other elements-affirming the solid dream, keeping the plan on track, managing money, providing knowledge, and backing up the entrepreneur to maintain the persistence necessary for survival.
So, when you're watching that late night "Get Rich Quick in Real Estate" infomercial on television, keep the key elements of entrepreneurial success in mind. If you have what it takes, then go for it- after you've defined the base of your dream and its niche, created your plan, gathered adequate capitalization, filled yourself with the required knowledge, built a committed team and recognized the need for persistence in moving forward. Then, you too can realize the entrepreneurial success of a Bill Gates, Google, Walt Disney!
A Dream With A Solid Base: The base needs to be the product or service. The dream includes the customer base. A great business needs a strong focal point- a major product or service needed and wanted by a target audience. You can invent the next great mouse trap- or you can improve the existing ones- or you can figure out ways to alternatively and creatively use the mouse traps. Diversity expands your ability and protects the business but even the most diverse successful businesses have a core expertise. Disney's is entertainment. Google's is information. Microsoft's is technology infrastructure. Find your base product or service, your best target customer, and always serve those focal points.
Planning: Dreams don't pay the rent. A successful business requires a realizable dream and the means to implement it. A business plan to start and expand your business is a key tool. It should be flexible enough to weather upturns and downturns, change with the times and the customer's needs. The most important thing is to commit the plan to paper (or disc) and periodically review it for relevance and to make sure you're following it.
Adequate capitalization: Show me the money! Too often, businesses fail because of lack of capital. When starting a business, one needs to look at more than the hard costs- at the carrying costs until such time as the money coming in the door exceeds the money going out. Capitalization can come from one's own personal resources, friends, relatives, loans, joint venture investments- whatever the source- it needs to be enough to allow you to deliver the promised product or service in the way that meets your market's needs.Capitalization also needs to be sufficient to cover the unanticipated as well as the anticipated costs.
Knowledge: Knowledge is a key element in business success. The most successful entrepreneurs take the time to learn everything about their business and always remember they need to keep learning. Successful business owners keep pursuing the knowledge necessary to run their business and keep it current.
Persistence: No one ever said it would be easy! Even the most successful entrepreneur has had his/her share of failures, frustrations, and challenges. The best entrepreneurs, however, work through it all and keep on going, even in the face of adversity. They stick to their dream, follow their plan (even if they have to tweak it), and find a way to survive the tough times.
An Invested Team: Successful entrepreneurs recognize they are not islands unto themselves. They surround themselves with capable people who care about the company and feel invested in its success. A good team can assist with all the other elements-affirming the solid dream, keeping the plan on track, managing money, providing knowledge, and backing up the entrepreneur to maintain the persistence necessary for survival.
So, when you're watching that late night "Get Rich Quick in Real Estate" infomercial on television, keep the key elements of entrepreneurial success in mind. If you have what it takes, then go for it- after you've defined the base of your dream and its niche, created your plan, gathered adequate capitalization, filled yourself with the required knowledge, built a committed team and recognized the need for persistence in moving forward. Then, you too can realize the entrepreneurial success of a Bill Gates, Google, Walt Disney!