Growing Pains: Growth Capital Sources and Considerations Part 1: Debt Financing

At a certain point in a company’s life cycle, founders are likely to be faced with the financial pinch of requiring outside sources of funding to finance further growth and expansion of the business. Once bootstrapping ceases to be an option, there are two main avenues to pursue for growth capital: traditional bank debt or private equity investment. Both options present pros and cons, and they are not mutually exclusive. Ultimately, the route founders decide upon will depend on the . . . Read More

SBA Eliminates “Direct” Ownership Rules for HUBZone Program

On March 26, 2018, the U.S. Small Business Administration (SBA) issued a direct final rule that changed the wording of 13 C.F.R. § 126.200(b)(1) to allow indirect ownership by U.S. citizens of companies in the HUBZone program. The stated purpose of the rule change is to align more accurately the rule with the underlying statutory authority. Prior to this change the HUBZone rules required that a HUBZone company be “unconditionally and directly owned” by U.S. citizens. The rule took effect . . . Read More

Corporate Record-Keeping and Compliance, or “Do I Really Need to Hold a Shareholders’ Meeting If I Am the Only Shareholder?”

When we are asked to review client corporate record-keeping, it is far too often the case that such record-keeping has fallen by the wayside and been overlooked. We understand that, for small businesses and/or entities with only a handful of equity owners, corporate record-keeping can seem a tedious or expensive chore. Some clients have asked “Do I really need to hold a shareholders meeting if I am the only shareholder?” The short answer is, “Yes, you do.” Both corporations and . . . Read More

Cybersecurity Update—Round II

As part of our continuing effort to keep you updated with new developments relating to compliance with the Department of Defense (DoD) Federal Acquisition Regulation Supplement (DFARS) 252.204-7012, this blog post provides a link to the long-anticipated template for a system security plan (SSP) and other key information related to implementation of the security controls set forth in the National Institute of Standards and Technology (NIST) Special Publication (SP) 800-171. Template for SSP The Computer Security Resource Center portion of . . . Read More

HUBZone Definition of “Employee” Not So Black-and-White

In a recent decision, HUBZone Appeal of Q Services, Inc., the Small Business Administration (“SBA”) clarified that the number of hours worked by a person does not bar SBA from examining the totality of the circumstances to determine whether that individual qualifies as an employee for HUBZone program eligibility purposes. Under SBA’s HUBZone regulations, if a person works a minimum of 40 hours per month (whether employed on a full-time, part-time, or other basis), that individual will be treated as . . . Read More

The Risk of Certifying as Small Without Tax Returns

We are regularly contacted at this time of year, before tax returns are due, by companies that wish to pursue small business set-aside contracts but have not yet filed their tax returns. These inquiries stem from the belief by some firms that, because their tax returns have not been completed, they may still self-certify as a small business while knowing, or suspecting, that their immediate, prior year revenues make them large. This misunderstanding of the size regulations can have dire . . . Read More

Do Millennials Pose a Retention Risk?

According to GAO, it’s reasonable for agencies to consider it in evaluating quotes. The topic of millennials in the workforce is no stranger to anyone in the working world. A plethora of articles, blogs, reports, polls, and studies have been devoted to the subject. Companies and a countless other number of people (including millennials) have debated the subject for years, and will likely continue to do so. This is especially true when it comes to how quickly (whether perceived or . . . Read More

Cybersecurity Update

Last month many of you listened to the webinar Jon Williams and I did regarding the December 31, 2017, deadline to comply with the Department of Defense (DoD) Federal Acquisition Regulation Supplement (DFARS) 252.204-7012 and how to implement the security controls set forth in the National Institute of Standards and Technology (NIST) Special Publication (SP) 800-171. Now that the deadline has passed and we’ve entered into a new era of being compliant with the rules, we thought it would be a . . . Read More

New Tax Bill: Areas of Interest for Small Businesses

The Tax Cuts and Jobs Act of 2017 (the “Act”) provides the most comprehensive tax reform in more than three decades. Small and medium business owners will find that the Act reduces their total taxes both on an entity and an individual level, while also creating tax incentives to spend on capital expenditures through accelerated depreciation of both used and new property. Here are some highlights from the Act. Tax Rates on C Corporations and Pass-Through Entities The change in . . . Read More

Borrowing Under the SBA’s 7(a) Lending Program: Three Factors to Bear in Mind

As an entrepreneur or a small business owner, you know that access to capital is a crucial component in both the setting up and growing of your business. Capital is necessary at every stage, for example, enabling your business to order goods before you expect to be paid, paying for accumulating overhead costs, investing in client development and marketing, etc. — having access to capital is the lifeline for your business. However, entrepreneurs and small business owners often find that it . . . Read More