The trend toward states' allowing small companies without health insurance to purchase no-frills plans is gathering momentum. As reported in June's Hotline, by spring three states had authorized plans exempt from many mandates. (State mandates require insurers to include various health coverages in all policies, raising the cost of basic insurance.) Since then, says Greg Scandlen of Blue Cross & Blue Shield Association, five more states -- Kentucky, Missouri, Illinois, Florida, and Rhode Island -- have passed such laws.
The federal laboratory system wants to reach out to small companies. Although under congressional mandate to increase technology transfers to small businesses, the government's more than 400 research labs have little outreach budget or experience to guide them. The Federal Laboratory Consortium recently started state-by-state workshops describing resources small companies can use (two big possibilities: technology licensing and a clearinghouse that connects companies with technical problems with appropriate government researchers). But, admits the FLC's George Linsteadt, the labs find it "very difficult" to reach small companies effectively. "If the small-business community has some thought about how they would like to work with the federal laboratory system, we'd be more than happy to hear their suggestions." His address: Box 545, Sequim WA 98382.
A handful of nonprofits are experimenting with "peer lending" for very small businesses in low-income communities. The technique, which has been successful in the Third World, substitutes peer pressure for collateral. People who need small loans (from several hundred to several thousand dollars) to start or expand businesses form groups of five; the group decides who gets money first -- the others get loans only if the first ones are kept current. It's too early to tell how the programs will do in the United States, but pilots are under way in Illinois, North Carolina, and Arkansas. At least five others are being developed, reports Community Information Exchange, in Washington, D.C.
If you think your banker is tough, wait until he or she gets artificial intelligence. Several larger banks are installing a system called The Lending Advisor to ensure commercial credit quality and consistency -- that is, to make lenders less likely to take unusual risks. Among the pluses for customers, the banks say the system brings new loan officers up to speed faster, hastens turnaround, and gets bankers to ask better questions. But don't rely too much on your relationship with your loan officer: The Lending Advisor demands more explanation if a banker types in that management is very strong while the numbers indicate otherwise.
-- Martha E. Mangelsdorf
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