3 Things You Should Know About Small Business: Jan. 23
NEW YORK ( TheStreet) -- What's happening in small business today?
1. Bank of America wants your small-business loan. Bank of America (BAC) announced Wednesday that it completed its goal of hiring more than 1,000 small-business bankers across the U.S. The Charlotte-based bank also said it extended nearly $8.7 billion in new credit to small businesses in 2012, up 28% over 2011. The bank's combined new and renewal small-business lending totaled nearly $20 billion.
"With the creation of the small-business banker role, Bank of America responded directly to what our clients asked for -- locally based, small-business experts who provide small businesses with the financial solutions necessary to sustain and grow their business," said Robb Hilson, small-business executive for Bank of America. "Making local expertise more accessible and enabling our clients' growth through new credit are essential to how we help them succeed."
Separately, Bank of America is also supporting Community Development Financial Institutions (CDFIs), it says, by providing more than $200 million to finance small businesses that cannot qualify for traditional loans. The bank also provided $12 million to the CDFI grant program, created in 2010 to unlock low-cost, federal micro-capital for small businesses, which has helped CDFIs give out more than $121 million worth of loans, serving over 10,000 local businesses.
2. Why Facebook rejects startups. Startup companies are eager to work with Facebook (FB) , given that getting in on new products and apps could give the young companies the momentum they need to succeed. However, the social media giant tends to shun working with startups, according to AllFacebook, an unofficial Facebook blog.
And here's why:
For one, the company needs scale. "Facebook tests features with only 1% of its user base, but that is 10 million people," the writer says. "Remember: If you don't have tens of millions of users, Facebook is not going to see 'scale.'"
Facebook also works in "startup mode," meaning that the team that builds new features is small, i.e. it doesn't have time to "cobble together enough small startup partners to reach the scale they need to test products," the article says.
Along with new products and features, there is always the possibility of product launch delays and even cancellations, which can be hard on a small business that relies on the success of the feature to get them going.
3. Bootstrapping in the Midwest. Often overlooked by startups in favor of more traditional hubs like Silicon Valley or New York, the Midwest is increasingly cultivating centers of entrepreneurial activity, according to Small Business Trends .
"You don't hear about them, because they don't have big funding announcements to make. The entrepreneurship media ignores all these companies that don't raise big money, but they generate big revenues," the article says.