More Financial Woes – GMAC and Non- profits

The economic crisis has caused a myriad of problems for consumers and corporations, as well. Because consumers have cut back on their donations to government organizations, the non-profits have received twenty percent less donations this year.

As we watch the number of homeless people increase and jobs decrease, one would wonder how the U.S. government is going to handle the projected increase in homeless people in the next two years. Homelessness is a worldwide problem as there are about just as many homeless people in te United States as there are orphans in Kenya. However, Kenya has a smaller population, approximately 37,000,000 as opposed to over 286,000,000 in the United States.

Many believe that the situation in our own country demands attention. People are sleeping in cars, under bridges or in homeless shelters as many people are losing their homes because of an inability to pay mortgages and car loans which increased or because homeowners lost jobs.

In the midst of all of this, the U.S. government has agreed to give more aid to GMAC, the largest provider of loans to Chrysler and General Motors. Recall, CIT Bank, the largest provider of loans to retailers, just filed for Chapter 11 Bankruptcy a few months ago after having received money from its shareholders to restructure their business.

This may be justified to help save jobs which may be lost if GMAC goes out of business. Will history repeat itself in the wake of the CIT Bank woes? As we begin a new year, we may not be out of the recession if GMAC goes bankrupt. It had to turn to the government because of its inability to seek funding from private investors.

Because of the Bernard Madoff scam, many donors have decided to give locally instead of on a federal level. As a result, many of the non-profits have experienced a decline in the amount of donations. This resulted in a cutback in services to the underserved populations.

The economic crisis has caused a complex set of problems to the United States. It was great to see that people resumed their spending for the holidays and hopefully this will increase as we enter a new year. If you enjoy the content on this blog, subscribe at the top of the page to keep up on the new posts.

Watch those Banking Fees

It is important to pay close attention to what the banks are charging you for fees on your checking account. I recently opened another checking account with my bank and just deposited a check which I had received from a client. I was intending to use this account just for one line of business. The bank had advertised “totally free checking,” but after I had written a few checks, all of a sudden the checks started bouncing. They said that I had failed to wait the required time to write checks.

To make a long story short, I ended up paying $295.00 in fees. When I asked for the account to be closed, they said they could not close it and they would continue to charge fees daily until it was closed. I was in shock. I had been reading about the problems that others were having with their credit cards and bank fees. I finally paid off the fees and closed the account.

When looking around for a checking account, read the contracts carefully. Often in a rush to open the accounts, some people fail to ask about and read about all of the charges. In my case, the contracts were online. I don’t know if there is a way to avoid all of the charges, but ask about all the fees before opening a new account, especially a business account.

It seems the banks are looking for ways to make up for losses on the home mortgages that went bad. This should end when the new credit card legislation goes into effect in February 2010. But between now and then be very careful about your banking habits.

Goldman Sachs to Help Small Businesses

Just when we thought small businesses were going to experience harder times than major retailers, Goldman Sachs comes to the rescue with a plan to educate and finance small businesses. Their impressive plan to funnel $500 million dollars to provide management education, mentoring, and access to capital to small businesses is the largest of its kind in history. Warren Buffet, who bailed out Goldman Sachs early in this economic crisis, will assist Goldman Sachs in providing theses resources to small businesses.

Major retailers have experienced a loss of funding due to CIT Bank having to eliminate their factoring loan program. Factoring loans were very popular around holiday time for financing Christmas inventory. Retailers now have to finance their own inventory.

Critics say that Goldman Sachs is using this opportunity to improve its image and bad reputation as a result of receiving bailout money and improving its financial position. It would help small businesses to know how to research grants and loans if they would like to take advantage of this opportunity to grow their businesses.

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