As the 2016 presidential candidates travel up and down New Hampshire, visiting with residents old and young, one of the top issues they need to address is how to create more jobs. Over 657,000 non-farm employees work for New Hampshire companies, and most of these are employed by small businesses across our state. The growth rate over the past two years has been commendable averaging about 1.5 percent per year, according to data released by the New Hampshire Employment Security.
Even before one of these presidential candidates takes office in January of 2017, we can start making progress on the job numbers in our state. One of the ways to do this is to lift a federal cap on a little known program called the Small Business Investment Company (SBIC) Program. This cap is keeping small business financing dollars on the sidelines, preventing the financing of small businesses that need it to grow and create jobs. Over the past two years New Hampshire companies have received over $50 million from SBICs.
My company, Seacoast Capital, is one of the SBIC companies hitting this federal cap which could affect our ability to finance additional New Hampshire companies. Over the past several years, we have made investments in companies throughout the region, including in Electrocraft, Inc., a Dover-based company needing financing to acquire an Indiana manufacturing company that produces specialized motors. This is just one example of the work we are doing to help companies grow and expand their facilities.
The SBIC Program has been exceptionally well-run from a federal government program standpoint. In fact, it does not cost the taxpayer any money and the combined investments across the country create tens of thousands of jobs every year. However, many SBICs like Seacoast Capital are hitting a limit in the federal law that will not allow us to continue to start new funds to invest in small businesses.
We at Seacoast Capital are truly grateful for the support of New Hampshire Sen. Jeanne Shaheen, who has made numerous attempts to secure a vote in Congress to lift this cap. We need her support to push this bill through Congress to President Obama#x2019;s desk this year. As I said earlier, we don#x2019;t need to wait until the election in 2016 to get any action on creating jobs in our state. Sen. Jeanne Shaheen, with the help of Sen. Kelly Ayotte as a cosponsor, is marching forward with this very important SBIC bill, and if successful, more capital can flow to New Hampshire companies without waiting for the actions of our next President.
Tom Gorman is a partner at Seacoast Capital in North Hampton.
The company also recently declared a dividend, which was paid on Friday, November 6th. Shareholders of record on Thursday, October 15th were paid a GBX 2 ($0.03) dividend. This represents a dividend yield of 0.55%. The ex-dividend date of this dividend was Thursday, October 15th.
In related news, insider Wilcke,Stephan sold 699,711 shares of OneSavings Bank PLC stock in a transaction dated Thursday, September 10th. The stock was sold at an average price of GBX 368 ($5.57), for a total transaction of £2,574,936.48 ($3,894,927.36).
OneSavings Bank plc (LON:OSB) is a United Kingdom-based lending and retail savings company. The Company operates through three segments: Buy-to-Let/SME, Residential Mortgages and Personal Loans. Its Buy-to-Let/SME segment offers secured lending on property for investment and commercial purposes. Its Buy-to-Let/SME segment also provides residential development finance to small and medium sized developers and secured funding lines to other lenders. The Companys Residential Mortgages segment provides lending to customers who live in their own homes, secured either through first or second charges against the residential home. Its Residential Mortgages segment also offers bespoke residential first charge, second charge and shared ownership mortgages, and provides secured funding lines to other lenders. The Companys Personal Loans segment offers unsecured lending services.
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No one ever promised that the challenges to growing a small business would be small. Entrepreneurs regularly confront issues that can threaten the very core of their companies, not the least of which is difficulty securing the financing they need to run and grow a sustainable business.
Related: TheSecret Credit Score Every Business Owner Should Know About, and How to Build Yours
Finding capital is becoming harder for a significant proportion of small businesses despite the wider variety of financing options available.Even though there are more lending options for small businesses than ever before, a crucial step ismissing in the process; and no one is paying attention, leaving business owners increasingly frustrated over their rejections for credit lines and loans.
The dream and the reality dont add up — a scenario confirmed by anew Creditera survey of 250 small and midsize businesses, which brings to light the struggle around bank financing, small business loans and the rejections small businesses suffer.
The realities small businesses face
The Small Business American Dream Gap Report examined todays economic landscape compared to a year ago and foundthat despite the positive outlook for small businesses, nearly three out of 10 small businesses reported finding itharder than in the past to reduce operating costs. Aquarter of small businesses, meanwhile, found it harder to plan for unforeseen expenses. Within the previous year, the survey revealed,20 percent of the small businesses surveyed said they hadconsidered shutting down, primarily because of lack of growth or cash-flow issues.
Those kinds of struggles had led 53 percent of those small businesses to apply for funding or credit lines over the past five years –and more than one in four said they hadsought loans multiple times. Yet, 20 percent of those applying over the past 60 months reported being turned down, and 45 percent of those denied said theyd beenrejected more than once. The most frustrating finding was that nearly a fourth–23 percent –of these businesses didntknow why theyd been denied.
As a result, 26 percent of business owners avoided hiring and expansion because, they said, they were frustrated with trying to access funds. Instead, they ponied up the money from their pockets and personal accounts. Those unable to tap into alternative funding sources turned to personal finances to cover expenses and keep their businesses going, a practice that put them at substantial risk.
In addition, the study determined that the last time the small business owners surveyed had needed funds, 62 percent had withdrawn personal savings, 22 percent had used business credit cards, 24 percent had used their personal credit cards and 10 percent had relied on family and friends. Only 36 percent of those seeking funds had obtained bank loans.
The crucial, yet missing, link
The study revealed that a primary reason small businesses cant obtain bank loans is their failure to understand theirbusiness credit score. Some 45 percent of entrepreneurs surveyed didnt even know they had a business credit score. And 72 percent didnt know where to find information about it. Even when they did, more than eight in 10 small business owners surveyed acknowledged that they didntknow how to interpret their score.
Related:4 Ways to Keep Your Business and Personal Credit Separate (and Why You Should Do Just That)
Education and empowerment around creditworthiness is a core issue, and can make or break a small businesss ability to get financing. Many business owners starting out are unaware of business credit,and may do significant damage to their credit without realizing it –primarily by maxing-out personal credit cards and/or credit lines because they believe they have no other choice. This short-term approach leadsto significant long-term damage.
Need more information about business credit? Consider the FICOscore. Just as every individual consumer has a one based on his or her personal credit record, every business has one developed by the FICO Liquid CreditSmall Business Scoring Service –the FICO SBSS score. Banks use this score to evaluate term loans and lines of credit up to $1 million.
The score furtherrank-orders small businesses by their likelihood of making on-time payments, based on their personal and business credit history, along with other financial data. On a scale of 0 to 300, a small business must score at least 140 to pass the pre-screening process the SBA sets on its most popular loan –the 7(a) loan.
If a business with poor credit history –or none at all –is denied financing, lenders are not required to notify the owner of the reason for the rejection.
Its crucial, therefore, for business owners to learn about their SBSS score and build credit,with timely payments to vendors and suppliers to keep that score up. Boosting the score may take years for companies with a derogatory or nonexistent credit history, so the process of strengthening creditworthiness needs to begin long before a credit application is submitted.
A number of business credit bureaus will generate a business credit score, including Dun amp; Bradstreet, Equifax, Experian and FICO. Anyone can purchase a business credit report from Dun amp; Bradstreet, Equifax or Experian, but it comes at a cost. Creditera offers a free service that provides access to summary reports from Dun amp; Bradstreet and Experian, a personal TransUnion report and alerts associated with any changes to business or personal credit.
Until recently, there was no direct way to access the FICO SBSS score, but small businesses can now get that numberthrough Crediteras subscription service. Its the only place small businesses can get that score online.
Why all of this matters
Ultimately, those who understand business credit are better positioned to succeed. The study found that nearly 40 percent of small business owners who didnt know their business credit score anticipated growth of less than 5 percent, while nearly three quarters who did, envisioned growth of up to 20 percent.
Another answer to the perplexity surrounding rejected funding came from a revelation in the study about owners understanding of credit issues. The small business owners surveyed who understoodtheir business credit scores, the study reported, were 41 percent more likely to be approved for a business loan than those who did not. And they were31 percent more likely to consider expanding their businesses.
Some 80 percent of those in the know about their scores, moreover,considered their funding process to have beensmooth, and half of those owners indicated that they wereless likely to turn to personal savings to grow their companies.
Business owners, then, should determinewhere they stand, and take control of the factors critical to the lenders, credit card companiesand even other businesses they work with. When owners understand their scores, they have an easier loan approval experience, are empowered to grow and thriveandhelp the overall economy thrive. That way, everyone wins.
Related:8 Ways to Build Your Companys Credit
It’s a great time to be shopping for small-business loans.
Small-business financing options have been expanding steadily since the economic crisis hit seven years ago. Will the trend continue? What’s in store for small-business loans and small-business borrowers in 2016?
NerdWallet asked several experts, including lenders and small-business advocates, what you should expect in the coming year.
Online lending has set a course of disruption
In the wake of the 2008 financial crash, as many traditional banks cut their lending to small businesses, online alternative small-business lending took off.
As of early 2014, almost one in five small-business borrowers sought financing from an online lender, according to a survey by the Federal Reserve. In 2015, online lending gained a “significant presence,” says Sandy Mackovich, director of outreach and business development at Working Solutions, a San Francisco-based lender geared to the needs of women and minority-owned small businesses.
“I only expect that to grow as it becomes more and more available to business owners,” she says.
Eighty percent of small-business owners go online first to search for a loan, says Rohit Arora, CEO of Biz2Credit, an online marketplace for small-business loans. That percentage is expected to grow in 2016, she says.
Andrea Gellert, chief marketing officer at OnDeck, says that lenders expect small-business owners “to become more comfortable with online lending the same way they have become more comfortable doing just about everything else online for their business — from buying inventory to managing shipping and logistics, to invoicing their customers, to business banking, to advertising and promoting their business, and the list goes on.”
The push for transparency in online small-business lending will increase
The growth of online small-business lending has led to concerns about transparency. Mackovich says some online lenders offer financing with “many hidden fees, and the APR is not disclosed upfront.”
“Business owners,” she says, “are getting into loans with incredibly high interest rates and high payments.”
Unlike traditional banks, online lenders face few regulations.
The issue over transparency has become such a pressing concern that a group of lenders — including Lending Club, Funding Circle and Opportunity Fund — this year introduced the Small Business Borrowers’ Bill of Rights, which they hope will serve as a framework for how small-business owners should be treated by lenders. For example, the document stresses that a small-business borrower has the right to transparent pricing and terms.
Some lenders expect the push for more transparency to get stronger in 2016. The Treasury Department has collected public comments about the online lending market, and members of Congress are now asking the Small Business Administration and Treasury for information on a regulatory framework.
“We think attention on lending transparency will sort out the ethical players from the rest in the industry,” Arora of Biz2Credit says. And having more transparency “will fuel online lending growth,” he adds.
In light of proposals for more regulation, lenders should be proactive in defining the future direction of their industry, says David Gilbert, president and CEO of online lender National Funding.
“Before government changes regulations or becomes more involved in our industry, we believe that lending companies will continue to create industrywide standards that help borrowers,” he says.
Despite being the tough-to-get option, SBA loans will remain a top choice
Amid the rise of alternative small-business lending, one traditional financing option remains popular: SBA loans.
The US Small Business Administration’s flagship 7(a) loan guarantee program has been so popular, the federal agency was forced to suspend it in July after it ran out of funds. Congress quickly raised the guarantee limit for the current fiscal year.
“I don’t see demand shrinking” for SBA loans in 2016, says Darius Mahajer, senior vice president and San Francisco market manager at OBDC Small Business Finance, a small-business lender in the San Francisco Bay Area.
Getting an SBA loan is still known to be a tedious process that can take months, and many small-business owners can’t meet all of the SBA’s stringent requirements.
Why does it take so long? It’s about quality, says George Mavridis, associate loan officer at nonprofit lender CDC Small Business Finance.
“The lenders must perform their due diligence,” Mavridis says. “SBA loans are guaranteed by the government, which in essence is the taxpayers.”
But the SBA is taking steps to streamline the process of applying for an SBA loan by introducing new online tools. One of them is LINC, which stands for Leveraging Information and Networks to Access Capital, an online system where a borrower fills out a questionnaire that is then sent to a pool of lenders. This makes it easier for a lender to find applicants who have potential for qualifying.
The LINC system has made it simpler for small-business borrowers to get access to SBA loans, Mahajer says: “It allows us to deploy these dollars much quicker.”
The agency is gearing up for an even bigger change with SBA One, which is the “total automation” of the process of applying for SBA loans, says Marlow Schindler, SBA lender relations specialist and public information officer.
The new system will “dramatically cut the time and cost of applying for SBA capital,” she says. SBA One is expected to be available nationally by spring 2016.
More on trends at financing forum
If you’re interested in learning more about trends in small-business financing, the San Francisco Small Business Development Center will host the Small Business Financing Forum on Tuesday at NerdWallet headquarters. The event, which includes a mini lender fair, is from 8 to 11 am on the sixth floor of 901 Market St.
The event is free, but space is limited; registration is required. For more information, visit sfsbdc.org, or call (415) 937-7232.
Find and compare small-business loans
NerdWallet has come up with a list of the best small-business loans to meet your needs and goals. We gauged lender trustworthiness, market scope and user experience, among other factors, and arranged them by categories that include your revenue and how long you’ve been in business.
Compare business loans
Benjamin Pimentel is a staff writer at NerdWallet, a personal finance website. Email: firstname.lastname@example.org. Twitter: @benpimentel
To get more information about funding options and compare them for your small business, visit NerdWallet’s small-business loans page. For free, personalized answers to questions about financing your business, visit the Small Business section of NerdWallet’s Ask an Advisor page.
Image via iStock.
NerdWallet and the San Francisco Small Business Development Center (SFSBDC) hosted the Small Business Financing Forum last week to provide small-business owners with the information, resources and tools they need to access capital.
“The questions we typically get from small-business owners are … What type of loan should I get? When should I get an online lender?” Cindy Yang, NerdWallet’s head of small business, told attendees. “Our thought process is: Why do you need a loan, and do you qualify? We take this into consideration to help find you the best solution. It’s NerdWallet’s job, in our view, to provide that clarity: what best suits your need to find something that you will qualify for.”
The forum welcomed nearly 100 local entrepreneurs and small-business owners to hear from the NerdWallet small-business team, the SFSBDC and a panel of small-business advocates and lenders on how to identify the right lending option, how to prepare for the process and where to go for additional resources and tools.
Since the 2008 financial crisis, numerous alternative lending options have arisen to address the small-business credit gap, including online lending, which is expected to become increasingly mainstream. Small-business owners are seeking more transparency in lending, and NerdWallet’s small-business team is on a mission to provide clarity for their financial management decisions.
Angel Cardoz, director of the SFSBDC, introduced the various resources and lenders present to provide attendees with information and answers to their questions.
Tong Qin, deputy director of the Small Business Administration’s San Francisco district office, discussed the level of confusion small-business owners experience when attempting to access capital and how the SBA fosters small-business growth through SBA-guaranteed loans.
And NerdWallet CEO Tim Chen shared his own experience and challenges in navigating the small-business financial space.
Paul Pendergast, vice president of the Golden Gate Business Association, hosted a panel of lenders from CDC Small Business Finance, Working Solutions, Celtic Bank, OBDC and Capital Access Group. Panelists spoke to the group about traditional and nontraditional lending solutions, and a mini information fair allowed attendees to learn more from the panelist lenders, Kiva Zip and Fundbox, directly.
Yang recapped various online lending and financing options available for small-business owners and explained how NerdWallet can help them make the right decision for their situation, type and size of business. Check out more small business resources from NerdWallet.
More about the SBDC:
The SBDC is a program of the US Small Business Administration and is part of a national network of nearly 1,000 centers throughout the country providing technical assistance to entrepreneurs. The San Francisco SBDC program provides free consulting services and workshops to support small businesses throughout the city. For more information, visit www.sfsbdc.org.
TD Bank announced Thursday that it has promoted Rick Waxman to senior vice president, product marketing director in corporate marketing, and Lisa C. Gruner to senior vice president, product marketing director. Both will be based in Mount Laurel.
Waxman, who has 20 years of experience in banking and marketing, will head product marketing for mortgage, home equity, wealth, corporate and specialty banking and TD auto finance. He joined TD Bank in 2009.
Gruner, who has 16 years of experience in marketing, advertising and bank management, will head product marketing for retail money, unsecured lending, and small business and commercial banking. She joined TD Bank in 2007 as vice president, marketing planner.
Your financial health in retirement can depend on your marital status and, in particular, how that status changes. If you are married, your fortunes can either sour or soar depending on whether (a) your marriage subsequently breaks down or (b) your spouse dies before you do.
When you get a quote for car insurance, you might think that only a few things matter your driving record, the cost and use of your vehicle, the type of coverage you need, and other factors directly related to operating an automobile. But the fact is that many insurers are basing your insurance quotes on data points that have nothing to do with driving, like your credit score, marital status, and ZIP code. New research shows that determining price using these types of demographic and financial factors (rather than driving record alone) can have a serious impact on the affordability of car insurance.
THE TL;DR VERSION
o New research shows that drivers who live in predominantly (more than 75%) white ZIP codes are seeing significantly lower car insurance quotes than those seen by drivers in predominantly African-American areas.
o Even when controlled for population density and income, these pricing disparities can still be found.
o Insurance companies often use credit scores to determine their premiums. This can result in drivers with DWI convictions — but pristine credit — paying less for insurance than drivers with pristine driving records, but poor credit.
o Most major insurers charge higher rates to single (and sometimes widowed) drivers, though this disparity can vary wildly (from 0% to more than 200%) depending on where you live.
While some states have restrictions on the use of things like credit scores in setting an auto insurance premium, only California has a law requiring insurers to offer drivers with clean driving records the lowest premium for which they qualify.
Recent reports from the Consumer Federation of America, and our colleagues at Consumers Union and Consumer Reports have tried to spotlight the various ways in which auto insurers use these unrelated or at best tangentially related bits of information to determine how much people will pay for coverage.
Since reading about insurance can be a slog, weve tried to boil down some of the most important discoveries to come out of this research.
1. Drivers in predominantly African-American ZIP codes tend to pay more than those living in areas with mostly white residents
This is the conclusion of a report released today by the Consumer Federation of America, which compared quotes from the nations five largest insurers to see what effect, if any, the use of non-driving factors had on the price of auto insurance in predominately African-American communities. As we explore the findings of the report, its important to note that the analysis did not attempt to prove that auto insurance companies were intentionally raising prices for consumers who live in predominately African-American ZIP codes. The CFAs research addresses the impact of auto insurance pricing methodologies on these communities, and provides compelling evidence that the current methods of pricing of auto insurance result in good drivers in predominantly African-American communities paying higher prices than similarly situated drivers in predominantly white communities, even when controlling for factors such as urban-density and income.
What You Can Do
If you believe that insurance rates should be based on your driving record and not unrelated factors, you can check this petition from our colleagues at Consumers Union.
The National Association of Insurance Commissioners also has an interactive map linking to the sites for insurance regulators in each state.
The same fictional driver profile 30-year-old single female with a clean driving record, no lapses in coverage, steady employment, a rental apartment, and a Fair credit rating, driving a 2000 Honda Civic around 10,000 miles a year was used to obtain quotes from the insurers in all of the areas included in the survey.
Researchers looked at insurance premiums for this fictional driver in a variety of environments urban to rural and across average income levels of area residents, from below $20,000 a year to more than $100,000 annually.
According to the report, on average, a good driver in a predominantly African-American community will pay considerably more for state-mandated auto insurance coverage than a similarly situated driver in a predominantly white community.
More precisely, researchers found that when a neighborhoods racial makeup is at least 75% African-American, car insurance premiums average 70% higher than those quoted for the same driver living someplace where the African-American population is below 25%. For the fictional driver in the study, that means a difference of more than $400 per year ($1,060, compared to $622).
Even at lower concentrations of African-American residents, the average premiums are still significantly more expensive. That same driver would face an average rate of $831 (a 34% difference) if she lived in a community that was between half and three-quarters African-American. The average premium drops to $768 when white residents account for half to three-quarters of the population. Thats still around 24% higher than people pay in predominantly white ZIP codes.
On average, drivers living in predominantly African-American ZIP codes see premiums that are 70% higher than prices in predominantly white areas.
Consumer Federation of America
These are all national averages, and include both rural and urban communities. To get a more accurate comparison, CFA also looked at drivers in similarly dense ZIP codes and once again found disparities.
In the densest urban communities where premiums are typically high because of traffic, crime, and potential for damage the average premium ($1,797) in predominantly African-American ZIP codes is 60% percent higher than in dense urban areas populated primarily by white residents ($1,126); a difference of more than $600.
The gap isnt as distinct in rural ZIP codes, where predominantly white communities see an average of $542 for their insurance premiums, 23% less than the $669 average found in predominantly African-American rural areas.
The biggest difference in insurance premiums was found when CFA researchers compared upper middle-income drivers. In predominantly white ZIP codes where the average annual income was between $63,000 to $102,000, insurance premiums averaged $717. Compare that to the same income range for predominantly African-American ZIP codes, where the average premium clocked in at $2,113 an increase of 194%, nearly triple the cost to the driver.
And since having a car is not optional for most working adults and having insurance is required everywhere but New Hampshire CFAs research suggests that some people earning a decent living are effectively being compelled to pay an additional $1,400 a year despite having a clean driving record.
Progressive amp; Farmers charge drivers in African-American neighborhoods rates nearly double their premiums for drivers in mostly white ZIP codes.
Of the five insurance companies included in the report, Progressive and Farmers demonstrated the most obvious gulf between rates in predominantly white and predominantly African-American neighborhoods. Both companies quoted rates for drivers living in mostly African-American communities that were nearly double the average premium for the same driver in ZIP codes where white residents account for at least three-quarters of the population (Progressive: $1,332 vs. $694; Farmers: $1,271 vs. $662).
GEICO had the lowest average rates of the five (predominantly white: $575; predominantly African-American: $876), but thats still a difference of 53% for not to beat this horse to death the same driver profile.
The CFA says the goal of this report is not to claim that insurers are intentionally charging more in non-white communities.
We believe, instead, that it would be more productive to focus on the impact of high auto insurance prices and the implications these findings should have for industry, regulators, and policymakers, reads the report.
As a result of their research, the CFA is calling on state legislators and insurance regulators to, among other things, require that all insurers provide a pricing report showing the premium for a standardized, safe driver in every ZIP code in the state.
Ideally, the report would also include demographic information about each ZIP code, as that added transparency would effectively require insurers to explain why certain communities are paying more or less than others.
2. Convicted drunk drivers with good credit might have better premiums than good drivers with poor credit
You can understand why a poor credit history would result in higher auto loan rates. But what does your failure to make a student loan payment seven years ago, or an unexpectedly huge medical bill you couldnt pay right away, have to do with the likelihood that youll get into an accident?
Its not like the insurance companies arent checking your driving history; if you have a clean driving record, it shouldnt matter whether your FICO score is 600 or 800.
And yet in all but three states California, Hawaii, and Massachusetts insurers are allowed to use your creditworthiness to determine your insurance premium.
Earlier this year, Consumer Reports found that credit scores can have more effect on your insurance rates than any other factor.
In some states, drivers with moving violations on their record could end up paying less than drivers with clean records, solely because of a difference in credit scores.
See the chart below for an example. According to CRs research (also using fictional, standardized driver profiles), drivers in Kansas with Excellent credit and a pristine driving record average $965 a year in car premiums. Merely having Good credit raises that average by $233 a year. If a Kansan has Poor credit, their insurance could soar to $2,266/year, nearly 2.5 times the rate for someone with credit.
More importantly, its almost $1,000 more than the average premium seen by a driver with a drunk driving conviction. So insurers in this case are saying that someone with bad credit is more of an insurance risk than someone whose record shows they willingly risked their lives and others by driving while intoxicated.
The finances of English universities are “weakening”, with the future trend towards lower surpluses and record borrowing “unsustainable”, according to England’s funding council.
Operating surpluses across higher education institutions are forecast to fall from 3.9 per cent of total income in 2014-15 to 2.4 per cent in 2015-16 and 2016-17, says a Higher Education Funding Council for England report published today.
The report, which comes ahead of the spending review, says that public funding cuts of 5 per cent a year over the next three years “could see the sector in a deficit position by 2017-18”.
Hefce’s report, based on financial forecasts from institutions and titled Financial Health of the Higher Education Sector 2014-15 to 2017-18, is the latest edition of its annual report on financial forecasts, but offers a far gloomier outlook than usual.
“Although currently financially sustainable, reducing surpluses and cash levels and a rise in borrowing, all signal a trajectory that is not sustainable in the long term,” it says.
Although there has been “a general weakening of financial performance”, the sector is expected to “remain financially sustainable in the forecast period”.
Hefce adds that future financial uncertainty “is likely to lead to continued volatility and growing variability in the financial performance of institutions, together with a widening gap between the lowest and highest performing institutions”.
The report follows a paper published by the right-of-centre Policy Exchange thinktank, which argued that the government should cut higher education funding and shift it into further education, as universities have “substantial cash reserves which could be much better utilised than sitting in banks”.
However, Policy Exchange was criticised by Andrew McGettigan, the writer and researcher, and Universities UK representatives for citing Hefce figures that did not describe cash reserves, but instead were a measure of reserves covering all assets, including property.
Hefce says that given reduced levels of public capital funding, institutions are having to use their own resources accumulated through surpluses or borrow externally to “enhance their infrastructure”.
And it adds that “forecast cash inflows from operating activities will be insufficient to fund the planned level of investment for the period 2015-16 to 2017-18. This may indicate that HEIs will either have to change their plans or raise additional funds through cash reserves or additional borrowing.”
Borrowing is forecast to rise from £6.7 billion at the end of July 2014 to £9.2 billion at the end of July 2018. Hefce describes this increase as going to “record levels”.
Overseas student income is projected to grow from 13 per cent of total income in 2013-14 to 14.8 per cent of total income in 2017-18.
But Hefce warns that just a 5 per cent shortfall per year in projected income from non-European Union students “would see the sector in a deficit position by 2016-17”.
Local Share Account applicants will be in a receiving mode #x2013; and mood #x2013; this holiday season.
For the first time, the Washington County LSA hearings will be held in December instead of January. They will unfold Dec. 7 and 8 in the public meeting room at Courthouse Square, downtown Washington #x2013; the same venue as the previous eight years.
Hearings will be scheduled from 1 to 5 pm Dec. 7 and 10 am to 12:45 pm Dec. 8.
Efficiency is the operative word related to the change, Jeff Kotula, chairman of the LSA review committee, said in an email.
#x201c;We could make the process easier by reducing the time between submitting the applications in October and the public hearings,#x201d; said Kotula, who also is president of the Washington County Chamber of Commerce and Washington County Tourism Promotion Agency.
#x201c;With the hearings in December, we can offer recommendations to the county commissioners earlier and successful applicants will have additional time to prepare their projects.#x201d;
A total of 81 applicants will present their cases for funding from the 2016 program #x2013; which they will do in 2015. The money comes from gambling revenue at The Meadows Casino from April 1, 2015, through March 31, 2016, and will go toward economic and community development projects countywide. The Washington County Redevelopment Authority administers the program.
Each organization requests a certain dollar amount, and must have secured funding from other sources that equals or exceeds the requested figure. At least one representative from each of the 81 bodies has three minutes to present a briefing before the review committee, which this year will include state Sen. Camera Bartolotta, R-Carroll Township.
The committee determines the recipients and the amounts each will get and forwards the recommendations to the county commissioners for approval or rejection.
The list then will be sent to the state Department of Community and Economic Development, with the funds being distributed during the summer.
As usual, demand outstrips supply. Applicants are seeking a total of $24.7 million, but about $6.5 million is generally available.
#x201c;At the end of the process,#x201d; Kotula said, #x201c;we want to ensure we are recommending projects that create new jobs, develop new water/sewage infrastructure and continue to promote economic development in Washington County.#x201d;
LSA requests are sorted into four categories: Economic Development, Community Improvement, Public Interest (sanitary, water, general) and Job Training.
Three requests are for $1 million-plus, led by West Pike Run Township#x2019;s bid for $2,348.591 for the Woodland Road Waterline and Booster Station Project. Middle Monongahela Industrial Development Authority is requesting $2 million for the Alta Vista Spec Building in Fallowfield Township, and the Peters Township Sanitary Authority is seeking $1 million for the Donaldson#x2019;s Crossroads Interceptor Replacement Project in Peters.