Microfinancing feeds the small business appetite for capital

It's fundamental to growth: nutrition is needed in order for anyone or anything to expand, improve and survive. It's also a fundamental law of nature - and business - that the big get bigger (and the small often fall behind) because they are better positioned to source that nutrition. So it goes that large businesses have typically had an advantage in securing financing to survive and prosper, and small businesses - the lifeblood of the global economy - have met disproportionate challenges in similarly being "fed."

That is, until microfinancing -- an important financing option for its tendency to support innovation and entrepreneurialism -- was added to the menu. Joining private equity funding, venture capital and angel investing in today's vibrant capital marketplace, microfinancing increases the chances that no business will go hungry.

Today's Catch - Microfinancing
Many small businesses struggle to find the capital for start up, primairly because large banks require personal collateral or security from the borrower. However, in 1992 that barrier-to-entry was dilluted with the development of the Small Business Association's Microloan Program. Since the program's debut, U.S. businesses requiring a financial shot in the arm (from $100 to $35,000) have worked with hundreds of program-administered nonprofits based in nearly every state to acquire start-up and operational funds. More than 12,500 loans totaling in excess of $112 million have been issued through the Microloan Program, according to Entrepreneur.com.

"Microfinancing widens the business sector from the bottom up and introduces a more diverse set of ideas and ventures in the corporate ecosystem," says Airfoil Senior Vice President Tracey Parry. "This form of financing can be a tremendous tool for the would-be small business owner. It is an exciting time in the economy, both domestic and global, as an increasing number of entrepreneurs who would not ordinarily have an opportunity to bring their products and services to market are given the chance with right-sized loans."

Microfinancing isn't perfect: higher-than-standard rates and identification of microlenders in one's community are real challenges. Still, there have emerged many microfinancing marketplaces that bridge the geographic gap by matching individual lenders with small businesspeople, both domestically and abroad. Kiva, providing "loans that change lives," and Acción USA, the nation's largest microlender, are two such microlending networks that help the world's entrepreneurs (from the truly impoverished to the moderately struggling) make strides toward economic success.

For the Heartier Appetite - Equity Funding, Venture Capital and Angel Investing
Simply put, equity funding is capital invested in a business in return for a share of the profits and ownership of part of the business. A form of equity funding that focuses on relatively high-risk businesses, venture capital ("VC") is invested with an expectation by the backer of above-average ROI. Although involving significantly higher levels of financing, equity and VC investors typically do not wish to "consume" the businesses in which they invest; rather, they would prefer to feed and run, providing nourishment for growth, and exiting upon an Initial Public Offering or sale, merger or acquisition of the business.

A business angel is a (usually affluent, individual) investor who provides business capital and counsel to start-ups seeking quick growth and profit-turn. Strategic assistance at key points in its development, appropriate financing and strong management skills are some of the most critical requirements for business success, and business angels fulfill these needs, usually in exchange for convertible debt or ownership equity.

Private equity is an increasingly vital mechanism to fueling innovation and the newest addition, microfinancing, fills the belly and gives vitality to a whole new class of aspiring - and inspiring -- businesses.

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Data-driven industry both craves and creates research product

By its pragmatic nature, the financial services industry is both a great producer and consumer of research. From the Beige Book report from the Federal Reserve Banks to the University of Michigan Consumer Confidence Index, it can be argued that no sector of the economy is as revered for, reliant upon, and influenced by, trending data; both that which it generates and that which it observes and integrates into its own projections. This extreme statistical dependence in turn, lends credence to the research being generated by the financial services industry, itself, which propogates more research.

A sampling of key financial and economic reports and statistics to become familiar with, if not already, (and where to locate them online):

• The Beige Book: Named for the color of its cover, this is one of the regular reports on regional economic conditions, published by the Federal Reserve banks.
• The MoneyTree Report: A quarterly study of venture capital investment activity in the United States, it is the only industry-endorsed research of its kind providing information on the emerging companies that receive financing and the venture capital firms that provide it.
• Leading Economic Indicators: A composite index of ten economic indicators designed to predict economic activity six to nine months in future. These indicators include:ss claims
• The average manufacturing-worker workweek
• Manufacturers' new orders for consumer goods and materials
• Vendor performance
• Manufacturers' new orders for nondefense capital goods
• Building permits
• The level of the S&P 500
• The inflation-adjusted measure of the M2 money supply
• The interest-rate spread between the 10-year Treasury note and the federal funds rate
• The expectations portion of the University of Michigan's Consumer Sentiment Index
• Consumer Confidence Index: Constructed from a random survey of 5,000 households in which consumers rate business conditions, labor market conditions and prospects for job and income growth. It is used in conjunction with other confidence measures (e.g. Consumer Comfort and Consumer Sentiment) to gauge consumer moods.
• Purchasing Managers' Index: A national manufacturing index based on a survey of purchasing executives at roughly 300 industrial companies.

In this vast pool of available research are takeaways for smart businesses in all industries looking to carve out differentiating positions. For those in the financial services arena, proprietary research can serve as a credibility-building platform, a tool for advancing an agenda within the industry and a viable source of business development. And regardless of business focus - financial services, real estate, technology, retail and beyond - savvy professionals are paying attention to thrid-party research and applying relevant analysis and commentary to improve their overall business performance.

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Barron's: A financial instiution covering financial institutions

In an increasingly paperless era, the life expectancy of any given newspaper is becoming shorter and shorter - which makes Barron's, the 85 year-old authoritative source for U.S. and global economic news and analysis, a true institution. Reaching approximately 313,000 business and financial leaders with each weekly edition, the publication covers U.S. financial information, market developments, and relevant statistics. It's a read for the truly knowledge-hungry -- a hallmark of Barron's reporting is both its retrospective and forward-looking coverage, including a wrap-up of the previous week's market activity, news reports, and an outlook on the upcoming financial week. According to the publication, this is news the business reader can use.

The publication's mission is to equip the stewards of the nation's wealth with practical, powerful information to facilitate "astute, profitable decisions about money." In other words, movers and shakers in the finance and investing community should pay close attention - the trading and financial insights and statistics in Barron's will make the smart even smarter and the profitable, more profitable.

Barron's is published in two sections, Market Week and The Main Section. To broadly characterize the sections, Market Week is heavily news- and stats-oriented, while The Main Section contains feature stories and columns more likely to focus on trends and predictions for specific companies, sectors or the economy, at large.

Sub-sections of note include Market Week's "Market Lab," a compilation of key indicators and data for stocks, bonds and the economy (according to Barron's, ". one of the most widely read, intensely followed package of statistical information found in the financial world") and The Main Section's "Up and Down Wall Street" commentary column that features the driving forces behind the week's financial markets. Both features contain trending information the financial community can leverage to inform both short-term and long-term investment activity.

Overall, Barron's creates for its audience members the impression that they belong to an exclusively well-informed club. Its tagline, urging readers to "See What Others Don't," suggests not only that readers will gain an intellectual advantage from its contents, but also that the firms, experts and analysts referenced within are a cut above the average business source.

"With its mix of economic data and wealth management advice in both hard copy and electronic formats, and a readership of high net worth individuals, Barron's is often a high-priority placement target for many companies in the financial services arena," says Airfoil Account Supervisor Todd Krieger. "At the same time, many successful entrepreneurs and business leaders cite Barron's as the resource they used to learn about the markets, so coverage in this publication will likely be noted by other 'rising stars,' the future leaders of America's leading companies."

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Patrick McLaughlin appointed to PR industry ethics board

Airfoil Account Manager Patrick McLaughlin has been appointed to the Public Relations Society of America's (PRSA) Board of Ethics and Professional Standards (BEPS) as Ethics Publicity Issues Liaison. During his three-year term, he will represent PRSA's southwest district and work with the committee at-large to ensure that members and policies adhere to ethical standards and facilitate ethics issue resolutions with Ethics Officers from PRSA Chapters and Sections. McLaughlin is a veteran of both PRSA volunteerism and of the agency; he earned his APR accreditation through the PRSA in 2004, served as 2006 Chair of the PRSA Technology Section special interest group (which he continues to serve in an ex-officio capacity) and recently celebrated his five year anniversary with Airfoil.

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Agency honored for website, work environment "cool" factor

Airfoil recently received the distinction of "Outstanding Website" in the Web Marketing Association's 2007 WebAward Competition. Now in its 11th year, the WebAwards is an annual award competition that recognizes creativity and innovation in websites. Of business websites representing 96 industries in the competition, Airfoil's was honored for meeting a "standard of excellence" among public relations sites.

From an outstanding virtual presence to an outstanding physical one, the agency has also been recognized once again as a Crain's Detroit Business "Coolest Places to Work." This distinction is particularly meaningful to the agency as success hinges on an online survey administered by the publication of nominating organizations' own staff. The survey gathered employees' opinions on company policies, benefits and "talent management practices, and landed Airfoil on an exclusive list of 60 metro Detroit businesses that offer truly exceptional workplaces.

Crain's isn't the only one paying attention to the agency's truly unique work environment: the National Association of Business Resources (NABR) also recently recognized Airfoil as one of "Metropolitan Detroit's 101 Best and Brightest Companies to Work For." The 2007 award program, established to honor "companies that recognize employees as their greatest asset," will culminate with a ceremony at the NABR's annual Best and Brightest Conference in October.

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Billionaire in Training Tour coming to agency markets

The Billionaire in Training North American Tour is making stops in Detroit (Oct. 9) and San Jose (Nov. 20), markets that are home to Airfoil offices and numerous agency clients. The agency is sponsoring the event in these two locations, and encourages those interested in hearing world-renowned entrepreneur and business coach Brad Sugars detail successful strategies for buying, building and selling businesses to attend.

To learn more about the tour and the contents of Sugar's seminars, visit www.billionaireintraining.net. If what you read makes the case for your attendance, we'd encourage you to register at the site as our guest using the promotional code USSP135.

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