Rutgers Professor
Warns Small Businesses
They May Fail even if
They’re Successful
Despite a company’s obvious market success, a Rutgers University
professor warned that a booming small business should not be misled into thinking
that it is safe from bankruptcy.
Dr. Arturo E. Osorio Fernandez, assistant professor of
professional practice in the area of management and global business at Rutgers
University, New Brunswick and Newark, NJ, said even successful small businesses
could still be doomed to fail.
Speaking at the Small Business Administration’s Annual
Lender Awards Ceremony that was hosted last month by the New Jersey Small Business Development Centers, Osorio observed that
these companies “access resources but are not capable of planning their
adequate use. They see those resources as fuel rather than seeding. They burn through
cash forgetting that they need to pay it back. The SBA and NJSBDC make sure
that their clients understand the difference and can take advantage of the
financial help you provide.”
Osorio, who is currently a fellow at The Center for Urban
Entrepreneurship and Economic Development (CUEED) and is actively involved with
the NJSBDC, has worked closely with small businesses. This relationship has
taught him that while business owners and entrepreneurs possess drive and
enthusiasm, they need to take time to develop and understand these traits.
“It takes people skills, not just number crunching. Their
success is not just because of a loan but because of their positive and strong
relationship with a financial institution,” he said.
Small businesses’ relationships with financial institutions
that provide funding and loan packages also enjoy a strong partnership with the
New Jersey Small Business Administration
and the NJSBDC through its 12 centers around the state.
“When entrepreneurs and small businesses need technical
help, someone to work with them on a business plan, this is where they come,”
Osorio opined.
The awards event recognized banks and other financial institutions
around the Garden State that have stepped up to the plate to support small
businesses, long regarded as the backbone of a thriving economy.
Osorio pointed out that over the past year, financial institutions’
combined efforts helped to provide 1,832 loans direct loans to small businesses
in New Jersey.
“If we are to be conservative, and only consider that each
one of those loans only impacted five households. That is, we are to only think
of the smalls businesses’ owners, employees, and vendors, then we are saying
that these almost 2,000 loans directly contributed to the wellbeing of
something around 40,000 individuals in New Jersey,” Osorio estimated. “If we
were to be more accurate, we could think of numbers that are way beyond this
conservative estimate as many of these loans went to the businesses that have
up to 500 employees and rely on more than 100 vendors each.”
As for actual dollars, he said these 2,000 loans amounted to
a staggering $413,121,658. Osorio added that the financial institutions
combined contributions to the state’s economy last year, in partnership with
the SBA, has put about $47,360 in investments per square mile in New Jersey
helping to secure the wellbeing of no less than 40,000 individuals.
“Not bad,” Osorio declared.
TD Bank was designated the diamond award winner at the event
and the No.1 participating third party lender in 504 loan program; No.1 in 7A
lender awards and small loans lender; and No.1 export lender totaling more than
$102.9 million in financing.
“These awards honor the works and the positive impact of
lender institutions throughout New Jersey. And by doing so, we also acknowledge
the impact that the Small Business Administration and the New Jersey Small
Business Development Centers have in the community. These institutions make
sure that entrepreneurs and small business are ready to ask for help, and are
capable of undertaking growth,” he said.
The NJSBDC is observing 40 years of providing no-cost assistance
and consultation to the state’s small businesses. The NJSBDC was one the first
SBDC pilot projects resulting from the enactment of a congressional law in
1977. The federal Small Business Administration (SBA) and the State’s Business
Action Center (BAC) are key funding partners. Higher educational institutions
around New Jersey host 12 regional centers.
So join the conversation or start one about the 40th
anniversary of the NJSBDC.
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