Hollywood area small businesses learn about credit and business resources

Hollywood’s Little Armenia district was the setting for California Controller John Chiang’s Small Business Tax and Opportunities Seminar on Aug. 28. Controller Chiang collaborated with the Armenian National Committee of Hollywood and the Armenian Chamber of Commerce to organize the event with the participation of groups like Consumer Action, The Greater Los Angeles African American Chamber of Commerce, the Thai Community Development Center, State Senator Curren Price’s office, State Assemblyman Kevin DeLeon’s office, and the Regional Hispanic Chamber of Commerce.

California State Controller John Chiang with Srbui Karapetian of the Armenian National Committee of Hollywood and Consumer Action’s Nelson Santiago

Small business owners learned about employment and payroll tax, sales and use tax, enterprise zone tax credits, business incentives and guaranteed loan programs created under the American Recovery and Investment Act. Presenters included experts from the Internal Revenue Service (IRS), the California Franchise Tax Board, the California Employment Development Department, and others. Representatives from the Metropolitan Water District and the Metropolitan Transportation Authority also talked to business owners about contracting with government entities.

Nelson Santiago of Consumer Action’s Los Angeles office was on hand to answer questions about credit and to help direct business owners to small business resources. Attendees also picked up brochures on rebuilding credit, micro business basics, and other topics created by Consumer Action’s MoneyWi$e project in partnership with Capital One Bank. Santiago says that attending outreach events like the Controller’s seminar are excellent opportunities for Consumer Action to help business owners by flagging credit mistakes they may later regret. “Business owners are starting to contact Consumer Action’s hotline more often with questions about credit,” Santiago said.  “Some of them have relied too heavily on credit cards for business expenses,” he added. Santiago explained that in today’s challenging economy and with credit card companies putting the squeeze on cardholders of all types, business owners’ credit histories are being threatened, which could affect their ability to qualify for business loans.

One business owner stopped at Consumer Action’s table and shared that she was a recent immigrant from Europe and had never established any type of credit. She wanted to know if she’d be able to get a business loan without any credit history. Santiago recommended that she take steps to establish credit as outlined in the MoneyWi$e brochures because only good credit would ensure that she’d qualify for a good loan at a good rate. Santiago was able to direct the business owner to a nearby Small Business Administration exhibit table where she could learn about the loans that might be available after she builds credit.

Another business owner talked to Santiago about his inability to qualify for business loans as a result of having been an authorized user on an ex-girlfriend’s credit card accounts. Although the credit cards had been at a zero-balance years ago when the couple separated, subsequently the ex-girlfriend charged up the accounts and failed to make required payments. Santiago explained to the owner how his case helped illustrate that being an authorized user on someone else’s credit card can have advantages and disadvantages. The authorized user can build good credit if the principal account holder handles the account responsibly. But when the authorized user goes into default, the negative information will appear on the authorized user’s credit report too. Santiago emphasized during the exchange that despite what some creditors had said to him, the primary account holder, and not the authorized user, is the one liable for the debt. Santiago suggested that the business owner should order his credit reports from Annualcreditreport.com to find out the extent of damage to his credit. Depending on what he learned, the business owner said he would consider getting help from select credit counseling or legal assistance resources provided by Santiago.

Charles Renn, owner of the Hive Los Angeles hair shop and art space which recently opened in Silver Lake, also visited Consumer Action’s exhibit table. Renn agreed with Santiago that credit cards are a good tool to help businesses establish credit so that they can qualify for business loans. He shared his frustration, however, with the high fees that merchants have to pay when they accept payment by credit card. “Many customers like to pay by credit card, but the processing fees associated with accepting cards can have a real impact on cash available for overhead,” he told Santiago. Santiago offered to share Renn’s concerns with Consumer Action’s National Priorities office in Washington, D.C.

Linda Sherry, Director of National Priorities for Consumer Action, said she’s glad to hear that small business owners are bringing these types of concerns to the organization. “When small business owners are harshly impacted by financial industry practices and feel that current policies provide no relief, we want to hear about it,” she said. “Consumer Action works tirelessly to help consumers achieve financial stability. Owning a successful small business is one way to reach such a financial goal,” she added. Sherry explained that the D.C. office is currently working for financial industry reform and that knowing about small business owners’ concerns can help their efforts. She added that it’s especially helpful when business owners are willing to contact elected officials and administrative agencies on pending legislation or other policy changes using Consumer Action’s Take Action page.

Srbui Karapetian of the Armenian National Committee of Hollywood thanked Consumer Action for participating in the event. She said that the purpose of the event was not only to help local businesses and to bring them resources, but also to help connect nonprofits with each other and with the state controller’s office. Karapetian noted that the success of Controller Chiang’s Tax Seminar was a result of partnerships formed in the process of putting on the event. She noted how even the abundant food served during the seminar was donated by local businesses. Karapetian expressed her hope that the collaborative effort would be “the beginning of a very promising partnership and a rewarding friendship between our organizations and our communities.”


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