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Featured Article filed under Banking, Independent Business | Written by Stacy Mitchell | No Comments | Updated on Apr 16, 2014

Understanding the Small Business Credit Crunch

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/understanding-small-business-credit-crunch/

Even as their big competitors are awash in capital, many locally owned businesses are struggling to secure the financing they need to grow.  A new ILSR analysis has found that, since 2000, bank lending to large businesses is up 36 percent, while small business loan volume has fallen 14 percent and  “micro” business loans — those under $100,000 — have plummeted 33 percent.

(The largest corporations do not even need to rely on bank loans, of course, but can finance their growth through the soaring stock and corporate bond markets.)

The problem is not a lack of demand.  In our 2014 Independent Business Survey, 42 percent of business owners that needed a loan in the previous two years reported being unable to obtain one.  Startups, businesses with fewer than 20 employees, and enterprises owned by minorities and women are having an especially difficult time.  Even with the same business characteristics and credit profiles, small businesses owned by African-Americans and Latinos are less likely to be approved for loans, according to one recent study.

One consequence of this credit shortage is that many small businesses are either not adequately capitalized or have been forced to rely on high-cost alternatives, such as credit cards.  Both scenarios make them more vulnerable to failing.

The broader consequences for our economy are significant.  Studies show locally owned businesses are a primary source of net new job creation, contribute to higher median household incomes, and increase social capital.  Yet independent businesses in many sectors are losing market share, while the number of new startups has steadily fallen over the last two decades.  Insufficient capital is a key culprit driving these trends.

To shed light on this problem and help inform policy discussions,  ILSR has published an overview of the small business lending landscape. Among the key takeaways:

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Featured Article, Resource filed under Energy, Energy Self-Reliant States | Written by John Farrell | 5 Comments | Updated on Apr 9, 2014

Minnesota’s Value of Solar

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/minnesotas-value-of-solar/

In March 2014, Minnesota became the first state to adopt a “value of solar” policy. It may fundamentally change the financial relationship between electric utilities and their energy-producing customers. It may also serve as a precedent for setting a transparent, market-based price for solar energy. This report explains the origins of value of solar, the… Continue reading

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Featured Article, ILSR Press Room, Resource filed under Broadband | Written by Lisa Gonzalez | No Comments | Updated on Mar 19, 2014

Minnesota Local Governments Advance Super Fast Internet Networks

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/minnesota-local-governments-advance-super-fast-internet-networks/

As in much of rural America, communities in Greater Minnesota struggle with connectivity. Some areas have no choice at all, forced to rely on dial-up or slow DSL. Others have an incumbent cable provider. A few local community leaders in Minnesota, conscious of the need for broadband to save public dollars, encourage economic development, and… Continue reading

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Featured Article filed under Independent Business | Written by Stacy Mitchell | No Comments | Updated on Apr 1, 2014

Two Big-Box Decisions Show How Smart Planning Policies Protect Good Jobs

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/smart-planning-policies-protect-good-jobs-cities-vote-big-boxes/

Although few cities take full advantage of them, planning and zoning powers are among the most potent tools communities have for shaping their economies. Two recent decisions, in Massachusetts and Wisconsin, underscore why land use planning matters and how smart policies can strengthen the local economy and protect good jobs. Continue reading

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Featured Article filed under The Public Good | Written by David Morris | No Comments | Updated on Mar 11, 2014

Crimea, Anschluss and the Enduring Quest for Autonomy

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/crimea-anschluss-enduring-quest-autonomy/

The upcoming Crimea referendum is both ordinary and extraordinary. Ordinary because more than 100 times since World War II geographically concentrated ethnic or linguistic groups have voted on the question of independence.  Extraordinary because never before have a people encountered a ballot allowing them to choose only between continuing subservience within their existing nation or… Continue reading