Small-biz strategies; Entrepreneurs discuss obstacles to their growth

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Newsday (New York)
By: James T. Madore
December 6, 2011

Small-biz strategies; Entrepreneurs discuss obstacles to their growth

Increasing the availability of loans, forming a buying group for employee health insurance and providing tax breaks to job creators were among the remedies small-business owners asked for yesterday to boost the economy.

More than 65 people met at Dowling College in Oakdale to discuss results of its recent survey of entrepreneurs and the obstacles they face to growth. The leading challenges are economic uncertainty, shrinking consumer spending, rising health care costs and taxes.

Many of the business owners said they were barely able to keep their doors open. They called for immediate help from government in financing and relief from taxes and regulations.

"We're in survival mode," said Michael Panagatos, who owns the Empress Diner in East Meadow with his brother and father. "We are paying bills week to week."

Panagatos also said getting a bank loan for an expansion project is impossible. He recalled applying for $500,000 from his bank of 30 years and being told he would have to put up the diner, a rental business and three family homes as collateral.

"I'm surprised they didn't ask me to put up my children," he quipped.

Other entrepreneurs expressed similar frustration, saying changes to the federal tax code would encourage investments from the wealthy. They also suggested tax breaks and other incentives for banks to underwrite risky loans.

However, one lender reported little demand for his microloans - each totaling a few thousand dollars - because of the shaky economy.

"My phones have been dead," said Robert Larson, chief lending officer for small business at the Community Development Corp. of Long Island. "There is a fear factor among small-business owners about borrowing because of uncertainty about the future."

Dowling sociologist Nathalia Rogers, who conducted the poll with a $200,000 grant from the U.S. Small Business Administration, said weak consumer demand and rising costs have entrepreneurs worried about paying bills. Medical insurance for employees has become a key issue recently.

Based on the poll results, along with comments of business owners who participated in focus groups and a conference, Rogers suggested insurance premiums could be reduced by "bundling" small companies into a buying group capable of winning the favorable rates given to large companies.

She also suggested creating a health insurance plan that would be self-funded and run by a large insurer, and tax credits for companies that hire workers and provide them with benefits.

Tax credits from Washington and Albany garnered the most support, more than 60 percent in the Dowling poll.

Richard Bivone, an East Meadow-based consultant who helps developers to navigate the permitting process, said, "Small-business owners are not investing in their business because of the tax burden."

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This page contains a single entry by CFED published on December 6, 2011 6:15 PM.

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