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Entries in Small Business Attorney (4)

Tuesday
Aug112009

Buy-Sell Agreements - Attorney

A good buy-sell agreement can prevent conflicts between business owners and help maintain the closely held status of a small businesses. In the context of a corporation, this issue is typically dealt within a buy-sell agreement between the shareholders; in the context of a limited liability company, buy-sell provisions are usually drafted into the operating agreement. Any business that has multiple owners should always deal with this issue, in writing, before potential arguments and problems arise.

If you would like to see more information regarding the types of questions business owners should consider when having a buy-sell agreement prepared, check out my recent blog post on the topic over at IndianaStartup.com.

Tuesday
Jul282009

Mergers and Acquisitions Attorney - Methods of Selling a Business

Buying or selling a business is not like buying or selling a car.  This "business" consists of the assets and equity of the business, along with the various ongoing liabilities of the business.  The assets can include physical assets, as well as intangible assets such as intellectual property, contractual rights and the goodwill the business has developed over time.  When you buy or sell a business, it typically means that some or all of the foregoing will be transferred.  There are many ways to do this.  I have outlined a few over at IndianaStartup.com - check out the post on buying or selling a business.  

The process is very complicated - and is best accomplished with the help of a Mergers and Acquisitions Attorney.

Wednesday
Jul152009

New Blog for Start-ups and Small Business - IndianaStartup.com

Up until now, this blog has really focused on start-up businesses and the many legal issues that come with running a start-up or small business.  That focus has been moved to a new blog I just launched today called IndianaStartup.com.  Here is short blurb about the new blog:

IndianaStartup.com is a resource for entrepreneurs, start-ups and small businesses. The site will constantly be evolving, but the focus is to provide information (not legal advice – see the Terms of Use/Disclaimer) that hopefully will be useful to the start-up community. Beyond the information supplied on this site, I am hopeful entrepreneurs will engage in a constructive dialgue by leaving comments about the articles posted here.

IndianaStart-up.com also serves as a platform for start-ups to let the world know they exist through our Start-Up of the Week feature. This is something that is provided to qualifying start-ups free of charge. Hopefully this site will gain a strong following, and the platform provided will help more than a few start-ups get the word out.

So please check out the new blog. I think it has lots of possibilities - and I am not totally sure what direction it will take.  I love the format, the platform and the message - so I am hopeful for good things.

I will still be posting to this blog, but more on about personal musings related to my law practice. 

I will also be launching two more blogs in the coming weeks - so stay tuned!

 

Tuesday
Jun092009

Small Business Law - SBA Interest Free Loan Program

The Small Business Administration has a new loan program for certain established small businesses that provides interest free loans - America's Capital Recovery Loan Program.  The new SBA loan program, according to the SBA:

ARC loans can be used to make payments of principal and interest, in full or in part, on one or more existing, qualifying small business loans for up to six months. ARC loans provide an immediate infusion of capital to small businesses to assist with making payments of principal and interest on existing debt. These loans allow borrowers to redirect cash flow from making loan payments to investing in their businesses, to help sustain the business and retain jobs. For example, making loan payments on existing loans with proceeds from an ARC loan can allow a business to focus more funds on core operations, such as buying inventory or making payroll.

ARC loans are interest-free to the borrower, carry a 100 percent guaranty from the SBA to the lender, and require no fees paid to SBA. Loan proceeds are provided over a six-month period and repayment of the ARC loan principal is deferred for 12 months after the last disbursement of the proceeds. Repayment can extend up to five years.

The best candidates for ARC loans are small businesses that in the past were profitable but are currently struggling, yet have been making loan payments or are just beginning to miss loan payments due to financial hardship.FAQs for Lenders and Borrowers.

ARC loans are made by commercial lenders who are SBA participants. The SBA will pay these banks a monthly interest rate throughout the term of the loan. Lenders can find more information here. Non-SBA lenders can easily become SBA participants by working with their nearest SBA district office. Businesses interested in applying for an ARC loan should first contact their current lender.

In order to qualify, a small business must be an established business, have financial statements demonstrating it was profitable in one of the past three years, and be able to project sufficient cash flow to meet current and future loan payments over a two-year period from loan approval. If your business does not meet these criteria, you can discuss your eligibility with your lender. ARC loans are not designed for start-up businesses.

You should always consider consulting a corporate finance attorney prior to taking out any sort of business loan to help you understand and receive favorable terms.