Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
HIGH LIGHTS
WASHINGTON
imfcrri
"Credit Sources
For Small Business'
LJOW small business may obtain cred-
it and capital for sound business
ventures is explained in a bulletin on
"Credit Sources for Small Business"
issued recently by the U. S. Depart-
ment of Commerce.
The private commercial bank is still
the main source of business credit,
the bulletin says, and small businesses
have even more reason to turn to their
banker for credit help than have large
companies which have increasingly re-
lied on internal financing and on the
issuing of securities to meet their capi-
tal and credit needs.
The bulletin discusses in detail the
types of credit extended by such di-
verse institutions as banks, industrial
banking companies, small loan com-
panies, factors, sales finance companies,
miscellaneous finance companies, in-
surance companies, equipment manu-
facturers, wholesalers and similar sup-
pliers, individual investors, investment
bankers, corporations seeking affili-
ates, branches or outlets, the Recon-
struction Finance Corporation, Fed-
eral Reserve Banks, Smaller War
Plants Corporation, Federal Housing
.Administration and community indus-
trial development groups.
Many banks are now setting up
special small business departments, ac-
cording to the bulletin which states
that in the choice of a bank the small
business men should "choose a banker
who possesses character and leader-
ship, one who is willing to assume a
risk providing there is a reasonable
chance of repayment; a progressive
banker, one who is alert to current in-
dustrial trends, willing to make loan-s
for new products and more efficient
processes."
"Such a banker," the bulletin says,
"knows that in a world of rapid
change, risk is a matter of careful
analysis, not merely of traditional
soundness."
The community banker, who more
often than not is a small business" man
THE MUSIC TRADE REVIEW, JANUARY, 1946
himself, may be more receptive to the
needs of the small business man than
the larger city bank, the bulletin says,
but sometimes the larger -banks quote
more favorable rates and the only an-
swer is to compare.
Once the small business man has
chosen a banker he should consult him
frequently, visiting him at his office
and inviting him to return the visit,
the bulletin advises, and adds:
"Show him around. Invite him to
look over your books. Freely explain
your plans to him, especially if they
involve expenditures out of the ordin-
ary. Do not try to conceal difficulties
from him. It is part of the banker's
code not to betray confidences. Mutual
frankness is the first basis of good
banking relations."
Business men who can qualify should
be able to turn to their bank for one
of the following types of loans, accord-
ing to the bulletin: character loans,
term loans, installment loans, loans on
accounts receivable, loans secured by
warehouse and field warehouse stocks
and equipment loans.
The difficulty small business often
encounters in securing adequate credit
is also discussed, and the bulletin notes
that "small concerns have often had
to resort to the unsound practice of
using renewable short-term commer-
cial loans for working capital, for
long-term seasonal capital, or even to
take the place of fixed long-term cap-
ital."
In general, the bullesin says, the
business man is justified in seeking a
loan when he can use it to cut costs
or otherwise increase efficiency by
more than the cost of obtaining the
additional funds, but he should not
forget that "other things being equal
the company that gets the credit it
needs at the least expense wins."
The booklet is designed for wide-
spread distribution among small busi-
ness men and may be obtained by
banks, or other financial institutions
wishing to distribute it, or by individ-
uals themselves, from the Superintend-
ent of Documents 25, Washington,
D. C, or from Department of Com-
merce field offices at 15 cents a copy.
NAMM NEWS
I Continued from page 19/
ment from Ft. Wayne indicates that
Farnsworth products will be fair
priced in those states where such laws
are in effect.
In making the announcement E. H.
McCarthy, Sales Manager, said:
"The 'Fair Trade Law' has al-
ready demonstrated most effectively
its place in modern merchandising
and has exerted a pronounced ten-
dency to eliminate vicious cutthroat
competition of a type which has been
injurious to the consumer as well as
to dealers, distributors and manufac-
turers."
In the meantime the Federal Trade
Commission has submitted a report to
Congress in which they claim the Mil-
ler-Tydings Act (the Federal Fair
Trade price law) is "unfair to the
consumer." The report claims the com-
mission's study revealed that the law
tends to "encourage price fixing and
to eliminate free competition. In prac-
tice, retail price maintenance serves as
a focal point for dealer cooperative ef-
forts to bring pressure on manufactur-
ers to place products under price main-
tenance at prices yielding dealer mar-
gins satisfactory to cooperating dealer
groups."
Columbia V. P.'s Announced
Edward Wallerstein, President of
Columbia Recording Corp. has an-
nounced that at a meeting of the Board
of Directors the following were elected
Vice Presidents:
Goddard Lieberson, Vice President
in Charge of Masterworks Division;
Arthur E. Satherley, Vice President in
Charge of Country Dance and Folk
Music; Andrew J. Schrade, Vice Presi-
dent in Charge of West Coast Oper-
ations.
25