Chicago Business Attorney Crucial When Small Biz Decides on Financing
Three recent stories show that small businesses can't afford to make many mistakes. This is especially true when they are deciding how to best deal with financing a small business in Chicago .
If a mistake is made early on, it could be a cloud that hangs over the company for years. If the wrong terms are agreed upon or the structure of a financing deal isn't beneficial to the company, they could be sunk.
In many of these cases, an experienced Chicago small business lawyer is the tool needed to make sure that the company's leaders are making sound decisions, weighed with the possible legal repercussions, to ensure the business' funding is going to allow it to be successful. Small businesses are a risky proposition for banks and lenders and without much of a history or proven track record, a business could get sucked into poor financing rates or terms that can keep them in a rut.
Several recent stories show the perils of making small business owners who make poor financing decisions. For one, The Wall Street Journal is reporting that the Chicago News Corporation is halting operations over this very issue.
The company, started just over two years ago, was designed to compete with Chicago's daily newspapers and other media options at a time when the newspaper industry was struggling. But because of funding issues, the company has told its employees it intends to shut down.
The news source, which has covered politics, business and other issues on its website and has dedicated articles to The New York Times every week, was started by a group of prominent journalists. The staff was recently told that because of funding problems, the website would soon be shut down.
As newspapers have struggled with increasing costs to print to supplies as well as the increase in Internet competition and a hit to circulation, many start-up nonprofit news sites have surfaced in recent years.
CNNMoney is reporting that small businesses are in a tough position because banks, which are recovering from the Great Recession themselves, are having a difficult time lending to small businesses. And while banks demand collateral, such as land or equipment, that may not be possible for many small companies.
This has led to many companies to seek riskier loans to get by. The article goes on to state that the cash advance industry -- which may charge outrageous interest rates to make up for the risk -- are making a killing at the expense of small business owners.
CBS Chicago reports that there may be some help for local businesses, however. The City Treasurer's office has a program that has provided 115 loans since 2009. City leaders believe that the loan program for small businesses is a jobs boost, as 90 percent of the city's businesses are classified as small business.
The city loans range from $2,000 to $50,000 and these are amounts that small businesses typically can only get by dipping into personal funds or high-interest loans.
Small businesses must be successful in order for our country to continue to grow and prosper. But if companies are taken advantage of by these risky, high-interest loans, it can sink as many businesses as it helps. While city-run programs may be beneficial, they must be properly vetted as well.
An experienced and skilled Chicago small business attorney understands the concerns of a small business owner. Analyzing all the risks and ensuring that legal loopholes aren't going to come back to bite the business is important. Be prepared when making the critical decision of how much to finance and from whom.
Jeremy A. Gibson & Associates is a law firm dedicated to business litigation in Chicago and elsewhere in Illinois. Call 877-452-4529 for a free consultation.
Small Businesses Seeking Loans Can Turn To City Treasurer, by Vince Gerasole, CBS Chicago
Firms turn to riskier financing, by Jose Pagliery, CNNMoney
Chicago News Cooperative to Halt Operations, by Stephanie Banchero and Douglas Belkin, The Wall Street Journal