Half of all small businesses are home-based according to the SBA Office of Advocacy. But the SBA guaranteed fewer loans in FY2008, but only because of a “perfect storm” of tightened credit by commercial lenders, declining creditworthiness, and reduced demand for loans from small business borrowers uncertain about the future.

SBA posted a record year in 2007 with nearly 100,000 loans approved, but that number dropped by nearly 30 percent in 2008.  (About 1% of small business have SBA loans). Oddly, average loan size increased from $142,000 to $183,000 between FY2007 and FY 2008. But the good news is these loans may actually contribute to more sustainable and successful small businesses. You start off with more money, you’re more likely to succeed, in other words. Or at least last longer.

According to the National Federation of Independent Businesses (NFIB) only 3 percent of the owners cited the cost and availability of credit as their primary business problem, far from the record 37 percent reached in 1982. Additionally, 34 percent reported that they found the money they needed, compared to 5 percent who reported problems obtaining financing. (The remainder did not want/need to borrow).

We’ve compiled everything we’ve learned from 25+ years as a banker, investor, venture capitalist, and entrepreneur into an all new and up-to-date eBook. Finding Money—Secrets of a Former Banker includes information about small business loans, raising money from angels and other private investors, venture capital, government loans, grants, preparing a business plan or financing application, and other money management advice. Finding Money is available for immediate download. Order your copy today.

Here are a few concise tips to help you through this credit crunch. (Count on it lasting at least through 2009, and probably into 2010 if no other major events extend it.)

1. Use your credit, your cash is always good. Credit may be tight, but if you have credit lines and credit cards use them instead of your savings. (Just don’t get late on credit card payments. They’ll eat you alive).
2. Borrow if you can. That may seem to contradict tip #1, but if you can borrow, do it! Pay back the loan in a short time (six months). Think of the money you spend on interest as an investment in your credit rating.
3. Don’t over-extend or get cocky and cancel your credit line. If you’re in pretty good shape right now, be careful not to put yourself in a risky financial situation. Even if you don’t need it, hang on to your home equity credit line, if you have one. The bank has probably reduced your maximum because of depreciated home values, but that cushion could be mighty handy if you need it when other credit is tight. What’s more, canceling a loan with a good credit history can actually hurt your credit rating.
4. Don’t max out your credit line or your credit cards. It makes you look desperate—or careless—and now is not the time to have money people questioning your ability to pay
5. Keep your borrowings on lines of credit and credit cards at less than half of the available credit.
6. Don’t borrow short term for long term purposes.

We’ve compiled everything we’ve learned from 25+ years as a banker, investor, venture capitalist, and entrepreneur into an all new and up-to-date eBook. Finding Money—Secrets of a Former Banker includes information about small business loans, raising money from angels and other private investors, venture capital, government loans, grants, preparing a business plan or financing application, and other money management advice. Finding Money is available for immediate download. Order your copy today.

A Firmware Engineer at Tesla Motors (they make a very cool electric sports car that goes 0-60 in 4 seconds!) decided to build these all-electric pink bunny slippers just to see if they could.

If you have a home based business, freelance and work from home, or telecommute, these babies are just the ticket. They only go 15mph, but for a jaunt to the grocery store you can save gas and keep your bunny slippers on too.

Here’s a first-hand account of a brush with scammers, from one of our readers. Fortunately she did her homework, and avoided wasting her hard earned money paying for a bogus kit.

Hello readers, my name is Jill and I would like to tell you about my experience. I am an educated woman and worked as a manager until recently, but due to personal reasons I have had to take a career break. However, I still wanted to earn some income, so I’ve looked at ways at working from home.

I have been viewing various websites, but have become quite skeptical about some of them. I wanted to make sure that any job advertised working from home was genuine, realistic and not a scam!

I came across sites about surveys at home, selling products via websites, writing blogs, etc., but was very dubious about them. Every so-called ‘company’ wanted me to pay for introductory packs upfront, and would continue to contact me via email knocking the price down each time.

I then came across a company called ABC Marketing Limited based in London, and the job involved stuffing envelopes at home. It seemed pretty easy, and once I left my details they sent me information via the post. This information was very interesting indeed, and very professionally done. However, they wanted a fee for an instruction pack which made me start to think, and also do my homework on this company.

From the small print on the back of their information I knew they were registered with Companies House and a VAT registered company. I researched Companies House and yes there were indeed registered and seem legitimate although I had to pay to see any reports on the company. I then looked up the BBC Watchdog website to view their details on Internet scam companies and was pleased they weren’t listed. However, I still was not 100% convinced. I then stumbled across this site ‘Undress4Success’ which lists information on all scams on the Internet. This site was full of information and confirmed the doubts I had, even though they had only one detail of an envelope stuffing scam – was this my company?? I emailed Tom who very quickly replied to my email and gave me advice and direction.

I then emailed ABC Marketing Limited a list of questions I had regarding the information they sent. I emailed again and rang them twice leaving messages either to ring me on my mobile or to answer my email . . . I am still waiting!! Obviously they are not that desperate for home workers or perhaps they are avoiding me and do not like the content of my email as they may realise I am not one to be sucked in!!!!  We may never know.

Be sure to look carefully at work-at-home job offers. You can bet, if they ask for money, that’s it’s a scam. Don’t lose your shirt when yuou Undress For Success.

Sadly, most of what we’ve written about small business grants has been pretty discouraging so it’s a pleasure to finally find a program that: 1) isn’t a scam, and 2) doesn’t take a degree in rocket science to win.

Each year, Whirlpool’s Mother of Invention Grant program helps a handful of Mom-owned businesses launch their ideas. 2008’s program offered both “green” and traditional categories. The grand prize winner walked away with a $20,000 grant, a dishwasher, a washer and dryer pair, and $3,000 for a new home office.  Four other individuals won grants of at least $5,000 along with other goodies.

More than 2,200 businesses entered their ideas in this 4th annual competition. Over a quarter of the ideas were for environmentally-friendly products or services, or implemented natural/recycled materials into their designs.

And the 2008 Whirlpool Small Business Grant Winners Are:

Grand Prize Winner ($20,000 and a $3,000 home office)
Estelle Keeter of Matteson, IL created the “MEDPACK”, a temperature-controlled case for medications.

First Prize Winner - Traditional ($7,000)
Cameo McGraw-Horton of Bothell, WA created improvements to a pet leash which offers flexibility for owners and added safety for animals when walking a pet.

First Prize Winner - Green ($7,000)
Catherine Kay of Silver Spring, MD created a product to help with potty training.

Second Prize Winner - Traditional ($5,000)
Veletta Rouse of Riviera Beach, FL created a product to help those with a cleft lip and palate.

Second Prize Winner - Green ($5,000)
Erika Berry of Ada, MI created the CleanyBeany. The product will be made of recyclable materials and is a container to fit on a dog’s leash and to hold money, refuse bags and wipes, in addition to a flashlight for safety.

Entries, are accepted between Mother’s Day and the end of July. Winners are announced in September. This year’s judges included: Julie Aigner-Clark, creator of Baby Einstein and co-creator of The Safe Side; Lori Pope, creator of Babyplays.com; and the 2006 Grand Prize Winner, Mary Anne Amato, inventor of the Quick Change Crib. Judging is based on Whirlpool brand’s own product/innovation guidelines. The company website reports that this year’s winning ideas, created solutions to unmet needs; were unique in the current marketplace; provided practical business solutions; and had compelling stories behind their innovation.

While the 2009 contest rules won’t be posted until next year, a peek at the 2008 program rules will give you a good idea of what’s involved.

We’ve compiled everything we’ve learned from 25+ years as a banker, investor, venture capitalist, and entrepreneur into an all new and up-to-date eBook. Finding Money—Secrets of a Former Banker includes information about small business loans, raising money from angels and other private investors, venture capital, government loans, grants, preparing a business plan or financing application, and other money management advice. Finding Money is available for immediate download. Order your copy today.