Industrial Development Bonds

BusinessWeek says, "Few entrepreneurs consider bonds when they need major long-term financing. But by using a little-known set-aside in the public finance world called an industrial development bond, or IDB, small companies with strong track records can gain access to as much as $10 million with rates as low as 3%—similar to what large corporations get in the commercial paper market. (Up-front fees range from $70,000 to $200,000, but total costs are still about 20% to 30% less than conventional bank loans.) And while IDBs were designed to be used specifically by small manufacturers, the definition of "manufacturer" may surprise you, as the American Recovery & Reinvestment Act expanded it to include technology companies that manufacture software or other intellectual assets."

Since now is the time to start a business, why not consider IDBs instead of a loan?

Employee Loyalty

Business Week states "Many companies can't afford Humanix's approach of lending workers money directly, especially in a slump. Mitch Bolnick, CEO of security company BCD Low Voltage Systems in Phoenix, let several employees borrow from the company in the past for emergencies like car repairs. But with sales slow this year and his staff of 16 already taking pay cuts, Bolnick has held off on new loans. "This year we've had to explain to them what the situation is and why, and they understand," he says. Still, he says assisting employees when possible helps BCD build loyalty among workers: Two have told him they turned down higher-paying offers."

What does this mean to other small businesses? It doesn't mean you should start providing private loans or funds for your employees today, but to think about their needs outside the office also because, "a financially unstable worker can cost a business as much as $480 per month in lost productivity and absenteeism."

Federal Minimum wage increases to $7.25

In 2007, before the recession started, Congress signed a legislation that increased the minimum wage to $5.85, followed by another increase in 2008 to $6.55, and now the final hike to $7.25. Secretary of Labor Hilda Solis says, "Between 3 million and 5 million people will be affected by the minimum wage rise from $6.55 per hour to $7.25 per hour"

If you are a small business owner, how does this affect you during this recession? According to "Robert Mayfield, who owns five Dairy Queen restaurants in central Texas, 'don't expect any increased spending to offset the added salary expenses.'"

To check exactly how much the minimum wage increased in your state, click here.