Dispute Mediation

Dispute Mediation: Is an effective method for addressing a variety of business-related matters, including:

·       Negotiating an ownership and/or partnership agreement when forming a new business or professional practice.

·       Resolving disputes between principals of an existing business or practice.

·       Renegotiating aspects of an existing ownership and/or partnership agreement.

·       Negotiating an amicable dissolution of an existing business arrangement when dissolution is the desired outcome.

·       Resolving conflicts between businesses.

·       Resolving personnel disputes.

Mediation helps to establish and maintain successful working relationships. In today’s ever-changing business environment, the difference between success and failure is often a function of the quality of the relationships within an existing business as well as between businesses.

Mediation has many advantages over traditional approaches, including the following:

·       A “win-win” result is often achieved because the agreement is satisfactory to each person.

·       New businesses can move forward more quickly as the principals have a clear, specific agreement about roles, responsibilities, goals and objectives.

·       Existing businesses can continue to grow and thrive, no longer hampered by unresolved problems or unclear agreements.

·       The parties’ ability to preserve an existing business relationship is enhanced.

·       It is less costly and less stressful than other alternatives, especially litigation.

·       A final settlement can usually be reached more quickly.

·       It provides a more confidential, informal, convenient and comfortable atmosphere in which to address the decisions that need to be made.

The results stand the test of time. Research shows that people are more likely to follow through with a mediated agreement and are less likely to engage in future litigation.

Mediation is a collaborative problem-solving and decision-making process. The goal is to help people make decisions that address as many of the needs and concerns of everyone involved as possible. The emphasis of the process is on mutual satisfaction, not winning and losing.

Prior to the start of mediation, we offer a free consultation to anyone who wants a face-to-face meeting with the mediator before committing to the process. This meeting is scheduled with the parties together and lasts approximately one-half hour. It is optional, however there is no charge.

The first formal step is to meet separately with each person. The purpose of this interview is to obtain a brief history of the situation at hand, get to know each person and his/her perspective on the issues that need to be addressed. This includes an understanding of one’s needs and concerns, as well as one's thoughts about how to resolve those issues. (Initially, this is easier to do if the other person is not present.)

Most of the remaining time is spent meeting together. During these sessions, we assist the parties in making decisions that meet as many of their needs and concerns as possible. At the beginning of the first joint session, the mediator presents the parties with a summary of the issues they are to address, based on what was learned in the individual interviews. Once everyone agrees on the agenda, the process begins wherever the parties chose.

We encourage our clients to make their agreements as detailed as possible. The more detailed the agreement is now, the less room there is to argue about what it means in the future. One of the reasons former spouses end up in litigation and/or mediation is because portions of their agreement were not clear.

Once an overall agreement is reached, the mediator will prepare a memorandum of understanding that describes the terms of the agreement in great detail. If either person has an attorney, we ask that the agreement be reviewed with the attorney before it is finalized or signed. Any questions raised by the attorneys are brought back to mediation in order to iron out any remaining wrinkles.

The individual sessions are scheduled for one and one-half hours at a time. The joint sessions are usually scheduled for two-hour blocks of time, as more can be accomplished in one two-hour session those in two one-hour sessions. However, the clients are charged only for the time that is actually used.

Negotiation formats vary in the degree of structure. Generally, the higher the level of trust between the parties, the less structure that is needed. Some examples of formats from the least amount of structure to the most are:

·       Direct discussion between the parties with no one else involved.

·       Direct discussion with the help of a facilitator or mediator.

·       Collaborative law process where attorneys actively participate in the negotiation process as advisors and spokespersons for their clients, but not in an adversarial manner. Other professionals may participate as needed.

·       Negotiations through and/or with the assistance of attorneys who represent their clients in an adversarial, litigation mode.

·       Settlement conference situation, where the parties and their attorneys go before a person of authority (attorney, judge, former judge, etc.), who uses experience and expertise to push them to make an agreement. Often times, that person shuttles between the parties who are kept in separate rooms. This may occur just shortly before they are scheduled for a court hearing.

Mediation vs. Arbitration

The difference between Mediation and Arbitration is straightforward. Small Business Mediation is voluntary. The parties mutually agree upon a fair settlement. Arbitration is mandatory. The Arbitrator makes a ruling, which is final. Arbitration is similar to court except it is quicker and cheaper. Arbitration clauses are included in many contracts and business agreements. Most Small Business disputes and complaints are resolved by voluntary Mediation before enforcing mandatory arbitration clauses. The major disadvantage with Arbitration is: The Arbitrator Ruling is Final. You cannot take further legal action in Court. In Small Business Mediation if both parties don't come to mutual resolution, the options for Arbitration or Court Litigation still remains.

Complaints vs. Dispute

Complaints are an expression of displeasure, grief, regret or resentment. A dispute is controversy that parties actively disagree; argue about, a matter of personal rights or policy.

Summary

Business people involved in a dispute usually consider filing a corporate lawsuit in order to resolve the dispute. Taking their case to court for litigation usually occurs when efforts that involve informal dispute resolution fail. Courts of law are indeed the places to settle differences in opinions that characterize a business dispute.

However, nowadays, most businesspersons tend to shy away from litigation as dealing with it usually takes a lot of time and money.

Some cons in litigating a business dispute:

One of the main disadvantages in having a business dispute go under the court system is that the parties involve lose control over the outcome or judgment. In court, a jury or judge will make the decisions concerning the matters at hand. The decision would always tend to point out a winner and a loser.

However, in reality, both the winner and the loser after the litigation, tend to both lose significantly in terms of expenses, time and focus to the management of the business.

Judgment on lawsuits are usually unpredictable and a party may become so engrossed in winning out their position that they do not think of the possibility that they may lost the case.

The whole process of litigation usually becomes very galvanizing. The tension created between the parties during the process make it difficult for them to patch up their differences and continue with their partnership. Thus, this could have detrimental impact on their financial status.

With these adverse effects, it is not surprising that most businesses undergoing a dispute tend to consider alternative ways to resolve it, which is relatively time efficient, cost effective and may encourage the nurturing of the partnership of the parties.

One of these alternative ways is mediation. Mediation can be accomplished at any given time and anywhere favorable for the parties involved. It can also be done with a hired dispute attorney present, or even without such presence. However, it would always be more productive to have such an attorney monitor the settlements.

Everyone wants to be heard and respected. BMCS advocates for mediation based on the fundamental belief that individuals, consumers and businesses can resolve their complaints and dispute when provided skilled guidance and support. The focus of Small Business Mediation is on achieving quick, fair justice.

While every Dispute Resolution is unique to the organization under impact, there are logical steps to take to handle and avoid the confusion of how to act.  Business Management Counseling Services can aid your company or organization prior and during this time.  We highly recommend a pro-active approach of preparedness, however when a pro-active plan does not exist we can facilitate the least amount of collateral damage to the event.

The Importance of the Mission Statement

The Mission Statement is a crucial element in the Strategic Planning of a business organization. Creating a mission is one of the first actions an organization should take. This can be a building block for an overall strategy and development of more specific functional strategies. By defining a mission an organization is making a statement of organizational purpose. I will define Mission Statements, specify their importance, discuss important factors of Mission Statements, and give a process to follow in their development.

Defining a Mission Statement is the first step in this discussion. There are several ways that Mission Statements are defined. Some people get a vision statement confused with a Mission Statement. "A vision statement pushes the association toward some future goal or achievement, while a Mission Statement guides current, critical, strategic decision making," (Drohan, 1999). In The Mission Statement Book by Jeffrey Abrahams, TRINOVA Corporation defines a Mission Statement in the following way, "A Mission Statement is an enduring statement of purpose for an organization that identifies the scope of its operations in product and market terms, and reflects its values and priorities," (Abrahams, 1995). Christopher Bart a leading researcher in the art of Mission Statements says,

"A good Mission Statement captures an organization’s unique and enduring reason for being, and energizes stakeholders to pursue common goals. It also enables a focused allocation of organizational resources because it compels a firm to address some tough questions: What is our business? Why do we exist? What are we trying to accomplish?"

Stone gives another definition extracted from Say and Live it: The 50 Corporate Mission Statements That Hit the Mark. "Corporate Mission Statements...are the operational, ethical, and financial guiding lights of companies. They are not simply mottoes or slogans; they articulate the goals, dreams, behavior, culture, and strategies of companies," (Stone, 1996). Basically, a Mission Statement is designed to say exactly what the organization anticipates it will achieve.

"Every company no matter how big or small, needs a Mission Statement as a source of direction, a kind of compass, that lets its employees, its customer, and even its stockholders know what it stands for and where its headed," (Abrahams, 1995). A Mission Statement gives everyone the opportunity to know what the organization is about and what it is not about ("Thinking Ahead," 1998). With this in mind an individual is able to decide if this mission is something that they can commit to ("Thinking Ahead," 1998). A well-developed Mission Statement offers several potential benefits. These benefits include direction, focus, policy, meaning, challenge, and passion ("Thinking Ahead," 1998). Direction states what the organization does and what it wants to be successful in ("Thinking Ahead," 1998). Focus concentrates on the company’s strengths and competitive advantages and tells people how to obtain them ("Thinking Ahead," 1998). Policy is a guideline of what a company finds acceptable and unacceptable and states organizational values ("Thinking Ahead," 1998). Meaning shows what a company strives to achieve and why they wish to do so ("Thinking Ahead," 1998). Challenge is the setting up of goals and measurements of achievement for employees ("Thinking Ahead," 1998). Passion makes everyone involved with the organization show feelings of enthusiasm, pride, and commitment ("Thinking Ahead," 1998). With all of these benefits it is amazing that some organizations do not establish a well-developed Mission Statement. However, if a good Mission Statement is developed it will not be effective if every member of the organization does not know how the mission will be accomplished (Bailey, 1996).

There are some basic elements that should be incorporated into a Mission Statement. To begin with, the target audience is important (Abrahams, 1995). It needs to be established whom the Mission Statement will be directed to. Some groups that may be considered are employees, stockholders, customers, and the community (Abrahams, 1995). The Mission Statement can be targeted at a combination of these groups or just one of them. Next, the length of the Mission Statement needs to be considered. Some companies Mission Statements are only a single sentence and others are very long including visions, philosophies, objectives, plans, and strategies (Abrahams, 1995). "All that’s necessary is that the mission be long enough to reach the target audience," (Abrahams, 1995). In addition, the tone is also important. In this aspect it is important to use appropriate language that is directed to the target audience and reflects the makeup of the organization (Abrahams, 1995). Establishing the correct tone involves a process of intentional, individual word selection (Abrahams, 1995). If you make the language too flowery and cumbersome a great Mission Statement may not be taken seriously (Drohan, 1999). "A Mission Statement should be written to encourage commitment and to energize all employees toward fulfilling the mission" (Stone, 1996). Endurance should also be considered. "Mission Statements should serve to guide and inspire the organization for many years," (Stone, 1996). The Mission Statement should be able to withstand time and ultimately have a meaning in the long-term standings of the organization. In the same respect the Mission Statement should also remain current. A Mission Statement created years ago may no longer be effective (Stone, 1996). When the competitive environment changes the mission should be revised (Stone, 1996). Finally, it should consist of an element of uniqueness (Stone, 1996). A company’s Mission Statement should be unique to the organization. It should portray the individuality of the company (Stone, 1996).

In considering specific components of a Mission Statement, Bart tracked the correlation between twenty-five items and company performance measured by financial measures (Bart, 1998). This research indicated that not just any Mission Statement would do. Bart found six items that are consistently linked to firm performance (Bart, 1998). These are a statement of purpose or general nonfinancial goals, a statement of values, specification of behavioral standards, identification of the organization’s competitive strategy, a statement of vision, and an expression of intent to satisfy the needs and expectations of multiple stakeholder groups (Bart, 1998). Companies that had Mission Statements that included these items showed higher performance than companies that did not use these components in their Mission Statements. This research indicates there is a strong correlation between performance and well-developed Mission Statements.

Developing a Mission Statement can be a very difficult process. Drohan says that when creating a Mission Statement it should be done as part of the strategic planning process for the organization (Drohan, 1999). This process should be started with and environmental analysis, followed by development and prioritizing goals and objectives (Drohan, 1999). After this process is finished, the mission of the company becomes clearer and an effective Mission Statement can be created (Drohan, 1999). Then, you need to decide who is going to write the Mission Statement (Abrahams, 1995). A mission-writing committee should be set up to perform this duty (Bailey, 1996). It can be either a group of only management members or a more diversified group of members from different areas in the corporation. It is more effective to use a committee made up of management and non-management personnel (Bailey, 1996). "The organization may lose valuable input by limiting the voices it is willing to hear; also, people may be more willing to carry out a mission that they helped develop,"

The committee should also include people from outside the organization (Bailey, 1996). These people may include customers, suppliers, and other interested parties (Bailey, 1996). Several different perspectives are important to be considered in developing a Mission Statement. By using different perspectives in the development the final product will be directed so each individual can comprehend the mission (Bailey, 1996). After a situation analysis and all the important factors are considered, the selected committee is ready to draft the Mission Statement. When the draft is complete it should be shared with all members of the organization (Stone, 1996). If agreement is established it is time to communicate the Mission Statement (Stone, 1996). In this process the form and structure the Mission Statement will take is decided (Stone, 1996). This form may include an annual report presentation, a copy printed on fancy paper and hung on a wall in a frame, a brochure, an engraved granite piece, or any other form (Abrahams, 1995). It is also important in the communication process to introduce the Mission Statement to all the employees and ask for suggestions on implementation (Stone, 1996). The final step is to operationally activate the Mission Statement. In order to do this, the company needs to make its strategies, tactics, and operations remain consistent with the Mission Statement (Stone, 1996). The Mission Statement should be translated into performance objectives and used as a basis for strategic planning (Stone, 1996).

The effective Mission Statement can be a great asset to an organization. When everyone is working together in a defined manner greater organizational purpose is achieved. A Mission Statement is a stepping-stone in the strategic planning process. It is important that when an organization implements a Mission Statement they apply it to their functional strategies and consider input from various groups.

Sales Forecasting Your Business

Sales forecasting is especially difficult when you don’t have any previous sales history to guide you, as is the case when you’re working on preparing cash flow projections as part of writing a business plan.

There are all sorts of ways to estimate sales revenues for the purposes of sales forecasting.

One point to remember when sales forecasting is that if you plan to work with a bank for financing, you will want to do multiple estimates so as to have more confidence in the sales forecast. How do you do this?

Sales Forecasting Method #1

For your type of business, what is the average sales volume per square foot for similar stores in similar locations and similar size? This isn't the final answer for adequate sales forecasting, since a new business won't hit that target for perhaps a year. But this approach is far more scientific than a general 2 percent figure based on household incomes.

Sales Forecasting Method #2

For your specific location, how many households needing your goods live within say, one mile? How much will they spend on these items annually, and what percentage of their spending will you get, compared to competitors? Do the same for within five miles (with lower sales forecast figures). (Use distances that make sense for your location.)

Sales Forecasting Method #3

If you offer say, three types of goods plus two types of extra cost services, estimate sales revenues for each of the five-product/service lines. Make an estimate of where you think you'll be in six months (such as "we should be selling five of these items a day, plus three of these, plus two of these.") and calculate the gross sales per day. Then multiply by 30 for the month.

Now scale proportionately from month one to month six; that is, build up from no sales (or few sales) to your six-month sales level. Now carry it out from months six through 12 for a complete annual sales forecast.

Don’t Just Do One Sales Forecast

Instead of forecasting annual sales as a single figure, use one or two of the sales forecasting methods above and generate three figures: pessimistic, optimistic, and realistic. Then put the figures in by month, as depending on your business, there could be HUGE variations by month. (Some retail firms do 50 percent of their gross sales around Christmas, from the end of October to the end of December, for example, yet barely get by June through August.)

Include Expenses in Your Sales Forecasting

Now put in your expenses by month, including big purchases by season (or however you buy materials/goods). Remember, you may buy materials or inventory in say, July, for Christmas, yet not get all of your receipts until 45 days after Christmas. There can be big cash flow implications. Also, will you be buying vehicles? Capital equipment? Make sure to show depreciation expense.

In your expenses, put in an allowance for bad debts. Figure how much of your sales are by cash, how much by credit card, how much by your extending credit. Deduct say four percent or more for credit card expense for that portion sold by credit card. For payroll expenses, put in estimated tax withholding payments quarterly that must be paid to the government.

If you're going to a bank for financing, be able to answer questions such as, have you made an allowance for a reserve cash account, for your slow months, but also in case you have to quickly replace a vehicle or equipment? You say you'll charge x dollars for your product, but what happens when your competition cuts the price by 33 percent and still makes a profit?

How specifically will you grow your business-- selling more to existing customers, selling existing products to new customers, selling new products to existing customers, and selling new products in order to attract new customers? They're going to want to see if you've got a real plan.

Remember that it is acceptable (and realistic) to have a negative cash flow projection for the early months of your cash flow projection period.

Sales Forecasting Summary

I guess you can see that instead of estimating one big sales figure for the year when sales forecasting, a more realistic monthly schedule of income and expenses gives you far more information on which to base decisions. That's what "keeping the books" is designed to do: give YOU information you can make good decisions on.

So in effect, you prepare three cash flow projections, where you vary the percentage of sales or other figures to arrive at three different scenarios: pessimistic, optimistic, and realistic. The pessimistic view should be the "worst case" situation; plan to have enough capital and patience to get through that scenario. If it turns out that the actual results are better than that - Fantastic!

The 2010 Small Business Jobs Act (HR 5297)

This past Monday, September 27, 2010, President Obama signed the Small Business Jobs Act (HR 5297).

(Worth the read if you are a Small Business Owner, CEO, CFO, or CPA.)

Here is a breakdown on what this legislation does for Small Business:

Introduced and sponsored by Congressman Barney Frank (D-MA)-May 13, 2010

Passed by the Senate-September 16, 2010

Passed by the House of Representatives-September 23, 2010

Signed by the President-September 27, 2010

•                Extension of Successful SBA Recovery Loan Provisions —Immediately Supporting Loans to Over 1,400 Small Businesses: With funds provided in the bill, SBA will begin funding new Recovery loans within a few days of the President’s signature, starting with the more than 1,400 businesses – with loans totaling more than $730 million – that are waiting in the Recovery Loan Queue. In total, the extension of these provisions provides the capacity to support $14 billion in loans to small businesses.  The SBA Recovery loan provisions have already supported $30 billion in lending to over 70,000 small businesses.

•                A More Than Doubling of the Maximum Loan Size for The Largest SBA Programs: The bill also increases the maximum loan size for SBA loan programs, which in the coming weeks will allow more small businesses to access more credit to allow them to expand and create new jobs. The bill will permanently raise the maximum size for SBA’s two largest loan programs, increasing the maximum 7(a) and 504 loans from $2 million to $5 million, and the maximum 504 manufacturing related loan from $4 million to $5.5 million.  In addition, it will temporarily increase the maximum loan size for SBA Express loans from $350,000 to $1 million, providing greater access to working capital loans that small businesses use to purchase new inventory and take on their next order – allowing them to create new jobs.

•                A New $30 Billion Small Business Lending Fund: The bill would establish a new $30 billion Small Business Lending Fund which – by providing capital to small banks with incentives to increase small business lending – could support several multiples of that amount in new credit.

•                An Initiative to Strengthen Innovative State Small Business Programs – Supporting Over $15 Billion in Lending: The bill will support at least $15 billion in small business lending through a new State Small Business Credit Initiative, strengthening state small business programs that leverage private-sector lenders to extend additional credit – many of which have been forced to cut back due to budget cuts.

•                Eight New Small Business Tax Cuts – Effective Today, Providing Immediate Incentives to Invest: The President had already signed into law eight small business tax cuts, and on Monday, he is signing into law another eight new tax cuts that go into effect immediately.

•                Zero Taxes on Capital Gains from Key Small Business Investments: Under the Recovery Act, 75 percent of capital gains on key small business investments this year were excluded from taxes. The Small Business Jobs Act temporarily puts in place for the rest of 2010 a provision called for by the President – elimination of all capital gains taxes on these investments if held for five years. Over one million small businesses are eligible to receive investments this year that, if held for five years or longer, could be completely excluded from any capital gains taxation.

•                Extension and Expansion of Small Businesses’ Ability to Immediately Expense Capital Investments: The bill increases for 2010 and 2011 the amount of investments that businesses would be eligible to immediately write off to $500,000, while raising the level of investments at which the write-off phases out to $2 million. Prior to the passage of the bill, the expensing limit would have been $250,000 this year, and only $25,000 next year.  This provision means that 4.5 million small businesses and individuals will be able to make new business investments today and know that they will earn a larger break on their taxes for this year.

•                Extension of 50% Bonus Depreciation: The bill extends – as the President proposed in his budget – a Recovery Act provision for 50 percent “bonus depreciation” through 2010, providing 2 million businesses, large and small, with the ability to make new investments today and know they can receive a tax cut for this year by accelerating the rate at which they deduct capital expenditures.

•                A New Deduction of Health Insurance Costs for Self-Employed: The bill allows 2 million self-employed to know that on their taxes for this year, they can get a deduction for the cost of health insurance for themselves and their family members in calculating their self-employment taxes. This provision is estimated to provide over $1.9 billion in tax cuts for these entrepreneurs.

•                Tax Relief and Simplification for Cell Phone Deductions: The bill changes rules so that the use of cell phones can be deducted without burdensome extra documentation – making it easier for virtually every small business in America to receive deductions that they are entitled to, beginning on their taxes for this year.

•                An Increase in the Deduction for Entrepreneurs’ Start-Up Expenses: The bill temporarily increases the amount of start-up expenditures entrepreneurs can deduct from their taxes for this year from $5,000 to $10,000 (with a phase-out threshold of $60,000 in expenditures), offering an immediate incentive for someone with a new business idea to invest in starting up a new small business today.

•                A Five-Year Carry back Of General Business Credits: The bill would allow certain small businesses to “carry back” their general business credits to offset five years of taxes – providing them with a break on their taxes for this year – while also allowing these credits to offset the Alternative Minimum Tax, reducing taxes for these small businesses.

•                Limitations on Penalties for Errors in Tax Reporting That Disproportionately Affect Small Business: The bill would change, beginning this year, the penalty for failing to report certain tax transactions from a fixed dollar amount – which was criticized for imposing a disproportionately large penalty on small businesses in certain circumstances – to a percentage of the tax benefits from the transaction.

•       (Sec. 103) Establishes in the Treasury the Small Business Lending Fund, administered by the Secretary of the Treasury to cover purchases of preferred stock and other financial instruments from eligible institutions (Small Business Lending Fund Program). Limits the aggregate amount of purchases to $30 billion. Requires all funds received by the Secretary in connection with such purchases to be paid into the general fund of the Treasury for reduction of the public debt. Prohibits more than 1% of the value of purchases made by the Secretary in implementing the Program from being used to make purchases from community development loan funds (CDLFs). Directs the Secretary to prescribe eligibility criteria to determine the financial ability of a CDLF to participate in the Program and repay the investment. Allows eligible institutions with assets of $1 billion or less to apply for a capital investment from the Fund not exceeding 5% percent of risk-weighted assets. Allows eligible institutions with assets of between $1 billion and $10 billion to apply for a capital investment from the Fund of up to 3% percent of risk-weighted assets. Prescribes requirements for the treatment of assets of holding companies and institutions controlled by holding companies. Requires an applicant institution (including a state-chartered bank) to submit:

•       (1) A small business lending plan describing how its business strategy and operating goals address the needs of small businesses in the areas it serves; and

•       (2) A plan to provide linguistically and culturally appropriate outreach. Permits CDLFs to apply for a capital investment from the Fund in an amount not exceeding 10% of total assets, as reported in the call report immediately preceding the application date. Permits an applicant institution to include other nonfarm, nonresidential real estate loans of under $10 million each in the determination of the amount of its small business lending. Declares ineligible for a capital investment from the Fund any institution that is either on the FDIC problem bank list, or has been removed from such list for less than 90 days. Prescribes requirements governing financial instruments issued to the Treasury by an eligible institution receiving a capital investment (including S Corporations). Sets forth financial incentives for small business lending by such institutions. Sets a 10-year deadline for repayment of a capital investment under the Program. Sets forth requirements governing financial instruments issued by a Community Development Financial Institution loan fund (CDFILF) receiving a capital investment under the Program. Makes incentives contingent upon an increase in the number of loans made. Sets forth an alternative computation for small business lending amount made by an eligible institution. Requires the Secretary to issue regulations and other guidance to permit eligible institutions to refinance securities issued to Treasury under the Community Development Capital Initiative (CDCI) of the Troubled Asset Relief Program (TARP) established by the Emergency Economic Stabilization Act of 2008 (EESA) and the TARP Capital Purchase Program (CPP) for securities to be issued under the Program, but prohibits participation by certain nonpaying CPP participants. Instructs the Secretary to require capital investment recipients to provide linguistically and culturally appropriate outreach and advertising in the applicant pool using media outlets which target organizations, trade associations, and individuals that represent or work within or are members of minority communities, women, and veterans. Requires the appropriate federal banking agency for an eligible institution that receives funds under the Program to issue guidance regarding mandatory prudent underwriting standards for loans it makes. Requires each institution receiving a capital investment under the Program to:

•       (1) Issue a quarterly report detailing new loans to small businesses; and

•       (2) State on its Internet website that, as a participant in the Program, it is seeking to make small business loans to qualified borrowers and may not discriminate on the basis of any factor prohibited under the Equal Credit Opportunity Act, including race, color, religion, national origin, sex, marital status, or age.

•       (Sec. 105) Instructs the Secretary, when exercising authorities granted under this title, to take into consideration, among other things, increasing the opportunity for small business development in areas with high unemployment rates that exceed the national average.

•       (Sec. 107) Directs the Inspector General (IG) of the Department of the Treasury to audit and investigate purchases of financial instruments under the Program through the Office of Small Business Lending Fund Program Oversight. Establishes the Office of Small Business Lending Fund (SBLF) Program Oversight within the Office of the IG. Instructs the IG to appoint a Special Deputy Inspector General for SBLF Program Oversight to lead the Office. Directs the Comptroller General to perform and report to the appropriate congressional committees on annual audits of the Program. Prescribes compliance certification requirements for Program participants and loan recipients. Prohibits the use of funds under this Act to pay the salary of an individual officially disciplined for viewing, downloading, or exchanging pornography on a federal government computer while performing official federal duties.

•       (Sec. 108) Makes appropriations to pay the costs of $30 billion of capital investments in eligible institutions, including the costs of modifying such investments, and the costs of administering the capital investments program.

•       (Sec. 109) Terminates the authority to make capital investments in eligible institutions one year after enactment of this Act.

•       (Sec. 111) Establishes the Small Business Lending Fund Program as separate and distinct from TARP. States that an institution shall not be considered a TARP recipient by virtue of a capital investment under this Act.

•       (Sec. 112) Directs the Secretary to:

•       (1) Study and report to Congress on the number of women-owned, veteran-owned, and minority-owned businesses that receive assistance as a result of the Program; and

•       (2) Disaggregate study results by ethnic group and gender.

•       (Sec. 113) Authorizes an eligible institution to amortize losses or write-downs, on a quarterly straight-line basis over a certain temporary period, in order to increase the availability of credit for small businesses. Prescribes amortization requirements and requires regulations defining minimum underwriting standards.

•       (Sec. 114) Expresses the sense of Congress that the Federal Deposit Insurance Corporation (FDIC) and other bank regulators are sending mixed messages to banks regarding regulatory capital requirements and lending standards, which is a contributing cause of decreased small business lending and increased regulatory uncertainty at community banks. Title II: State Small Business Credit Initiative - State Small Business Credit Initiative Act of 2010 -

•       (Sec. 203) Establishes a seven-year State Small Business Credit Initiative (Initiative), administered by the Secretary to allocate federal funds for FY2009-FY2010 to participating states with capital access programs.

•       (Sec. 205) Prescribes eligibility criteria for state capital access programs providing portfolio insurance for business loans. Requires the portfolio insurance to be based on a separate loan-loss reserve fund for each financial institution, with:

•       (1) Premiums paid by the financial institution lenders and by the business borrowers to the reserve fund to have their loans enrolled in it; and

•       (2) State contributions to the reserve fund in amounts equal to such premium charges. Limits portfolio insurance to loans of up to $5 million to borrowers with 500 employees or fewer at the time that the loan is enrolled in the program. Requires the Secretary to approve for federal contributions any state capital access program meeting specified minimum requirements. Requires an applicant state to report to the Secretary how it plans to use the federal contributions to the reserve fund to provide access to capital for small businesses in low- and moderate-income, minority, and other underserved communities, including women- and minority-owned small businesses.

•       (Sec. 206) Authorizes a participating state that establishes a new, or has an existing, eligible credit support program to apply for the Secretary's approval of a state other credit support program [sic] for federal contributions to, or for the account of, the state program. Requires a state other credit support program, among other eligibility criteria, to demonstrate that one dollar of public investment by the state program will cause and result in one dollar of new private credit, with a reasonable expectation that, when considered with all other state programs, they together have the ability to use new federal contributions to cause and result in amounts of new small business lending at least 10 times the new federal contribution amount. Requires such a program to extend credit support to borrowers with an average size of 500 or fewer employees, but in no event to borrowers with more than 750 employees. Requires such credit support to target loans with an average principal amount of $5 million or less, but in no event more than $20 million.

•       (Sec. 208) Authorizes the reduction of federal allocations to the state or termination of further allocation transfers to the state upon its termination of participation in the program, or failure to submit timely and complete reports, or its noncompliance with the terms of the allocation agreement.

•       (Sec. 209) Directs the Secretary to:

•       (1) Establish minimum national standards for approved state programs; and

•       (2) Provide states with technical assistance for starting programs and generally disseminating best practices. Makes appropriations. Terminates the program at the end of seven years.

•       (Sec. 211) Directs:

•       (1) The IG to audit and investigate the use of funds made available under this Act; and

•       (2) The Comptroller General to audit the program annually and report the results to the appropriate congressional committees. Requires any financial institution receiving financial assistance under this title to certify compliance with regulations requiring them to verify the identity of persons seeking to open an account, including any appearance on a list of suspected terrorists or terrorist organizations. Requires any private entity receiving financial assistance under this title to certify to the participating state that its principals have not been convicted of a sex offense against a minor. Prohibits the use of funds under this title to pay the salary of an individual officially disciplined for viewing, downloading, or exchanging pornography on a federal government computer while performing official federal duties. Title III - Small Business Early-Stage Investment Program - Small Business Early-Stage Investment Program Act of 2010 -

•       (Sec. 302) Amends the Small Business Investment Act of 1958 to instruct the Administrator of the Small Business Administration (SBA) to establish an early-stage investment program to provide equity investment financing to support early-stage small businesses. Permits program participation by any existing or newly formed incorporated body, limited liability company, or limited partnership organized under federal or state law for the purpose of performing the functions and conducting the activities contemplated under such program, and any manager of a small business investment company. Requires a participating investment company to make all its investments in small business concerns, of which at least 50% are required to be early-stage small businesses. Requires a participating investment company to convey an equity financing interest to the Administrator, entitling the Administrator to a pro rata portion of any distributions by the participating investment company equal to the percentage of capital in the participating investment company that the equity financing constitutes. Limits the manager profits interest payable to the managers of a participating investment company to 20% of profits, exclusive of any that may accrue as a result of the capital contributions of any such managers. Requires a participating investment company to make all distributions to all investors in cash within a reasonable time after exiting investments, including following a public offering or market sale of underlying investments. Creates within the Treasury a separate fund for equity financings, to be available to the Administrator as a revolving fund for program purposes. Requires recipients of equity financing under this Act to certify they are in compliance with specified federal requirements governing immigration, sex offenders, and pornography.

•       (Sec. 304) Prohibits funds appropriated for the program from being used for a congressional earmark. Title IV: Miscellaneous - States that the budgetary effects of this Act, for compliance with the Statutory Pay-As-You-Go Act of 2010, shall be determined by reference to the latest statement titled "Budgetary Effects of PAYGO Legislation" for this Act, provided that such statement has been submitted prior to the vote on passage. Title V: Tax Provisions - Small Business Jobs Tax Relief Act of 2010 - Subtitle A: Small Business Tax Incentives - Part 1: General Provisions -

•       (Sec. 501) Amends the Internal Revenue Code to increase from 50% to 100% the exclusion from gross income of the gain from the sale or exchange of qualified small business stock acquired after March 15, 2010, and before January 1, 2012. Part 2: Limitations and Reporting on Certain Penalties -

•       (Sec. 511) Limits the penalty for failure to disclose a reportable transaction (a transaction determined by the Internal Revenue Service [IRS] as having a potential for tax avoidance or evasion) to 75% of the decrease in tax resulting from such transaction.

•       (Sec. 512) Requires the Commissioner of Internal Revenue to report by December 31, 2010, and annually thereafter, to the House Committee on Ways and Means and the Senate Committee on Finance on penalties assessed for certain tax shelters and reportable transactions. Part 3: Other Provisions -

•       (Sec. 521) Increases the tax deduction for trade or business start-up expenditures from $5,000 to $20,000 in 2010 and 2011.

•       (Sec. 522) Revises the definition of "qualified nonrecourse financing" to include qualified nonrecourse real property or Small Business Investment Company financing as amounts at risk for purposes of determining the deductibility of losses from certain investment activities, including farming, leasing, and energy exploration.

•       (Sec. 523) Excludes from gross income any amount paid for a borrower under the Small Business Administration (SBA) borrower assistance program. Subtitle B: Revenue Provisions -

•       (Sec. 531) Revises rules for valuing assets in grantor retained annuity trusts to require that the right to receive fixed amounts from an annuity last for a term of not less than 10 years, that such fixed amounts not decrease during the first 10 years of the annuity term, and that the remainder interest have a value greater than zero when transferred.

•       (Sec. 532) Excludes any fuel with an acid number greater than 25 from the definition of "cellulosic biofuel" for purposes of the tax credit for alcohol used as fuel.

•       (Sec. 533) Increases by 7.75% the estimated tax installment for the third quarter of 2015 for corporations with assets of not less than $1 billion. Title VI: Plain Writing Act - Plain Writing Act of 2010 -

•       (Sec. 604) Requires the head of each executive agency to:

•       (1) Designate one or more senior officials within the agency to oversee the agency's implementation of this Act;

•       (2) Communicate this Act's requirements to the agency's employees;

•       (3) Train agency employees in plain writing;

•       (4) Establish a process for overseeing the agency's ongoing compliance with this Act's requirements;

•       (5) Create and maintain a plain writing section of the agency's website that is accessible from its homepage; and

•       (6) Designate one or more agency points-of-contact to receive and respond to public input on the implementation of this Act. Requires each agency, by one year after enactment, to use plain writing in every covered document of the agency that the agency issues or substantially revises. Defines "covered document" to:

•       (1) Mean any document that is relevant to obtaining any federal benefit or service or filing taxes, that provides information about any federal benefit or service, or that explains to the public how to comply with a requirement the federal government administers or enforces;

•       (2) Include (whether in paper or electronic form) a letter, publication, form, notice, or instruction; and

•       (3) Exclude a regulation. Allows agencies to follow the guidance of:

•       (1) The writing guidelines developed by the Plain Language Action and Information Network; or

•       (2) Guidance provided by the agency head. Title VII: Sense of Congress on Agriculture and Farming Small Business Loans -

•       (Sec. 701) Expresses the sense of Congress that:

•       (1) Agriculture operations, farms, and rural communities should receive equal consideration through lending activities for small businesses, particularly small- and midsize farms and agriculture operations; and

•       (2) Attention should be given to ensuring adequate small business credit and financing availability in agriculture and farming sectors. Title VIII: Small Business Borrower Assistance Program - Small Business Assistance Fund Act of 2010 -

•       (Sec. 801) Directs the SBA Administrator to implement a Small Business Borrower Assistance Program providing payments to lenders of principal and interest on qualifying guaranteed small business loans of up to $300,000. Requires automatic enrollment in the Program of each borrower receiving a qualifying small business loan, unless the borrower opts out. Requires the Administrator to commit an amount to each borrower equal to 6% of the principal disbursed amount of the borrower's qualifying loan. Authorizes appropriations.