author

About Julija A.

Julia A. is a writer at SmallBizGenius.net. With experience in both finance and marketing industries, she enjoys staying up to date with the current economic affairs and writing opinion pieces on the state of small businesses in America. As an avid reader, she spends most of her time poring over history books, fantasy novels, and old classics. Tech, finance, and marketing are her passions, and she’s a frequent contributor at various small business blogs.

Blog posts

Mortgage rates are steadily climbing for a sixth consecutive week, prompting buyers to steer clear of the market. The latest data shows an increase to 2.98% for a 30-year fixed-rate mortgage offer. According to the Mortgage Bankers Association, the demand for mortgages fell, with total application volume decreasing by 5.1% the same week. Joel Kan, MBA’s associate vice president of economic and industry forecasting, stated that the rates had been climbing ever since hitting the survey’s lowest point in December last year. Last week, the rates reached their highest level since November 2020, according to MBA’s weekly survey, which the organization started more than 30 years ago. When comparing these figures to the ones from last year, the rates are still 0.79% lower than in February 2020. Mortgage refinancing experienced a 5% drop in the past week but is 51% higher than it was the year before. Mortgage applications to purchase a home fell 6% in the past week, following the trend over the past six weeks. Yearly, it is still 17% higher than the total mortgage applications for purchasing a home the previous year. However, while the spike heavily influences refinancing mortgage rates, the overall surge in mortgage interest is attributed to a record low inventory of homes available. The total number of homes available for sale is lower by nearly 43% compared to the year before. The most significant shortage is in the availability of lower-end homes, impacted heavily by the seller’s overall unwillingness to go through the trouble of putting their home on the market due to the coronavirus pandemic. As such, homes available on the market are not only scarce but also cost more. The average loan size for purchasing a home hit $412,200, another survey high. This is the result of both the inaccessibility of lower-end homes and a shift in the way people buy houses. A new survey by the National Association of Home Builders suggests that over 40% of buyers were outbid for their desired property. Joel Kan also stated that “purchase applications cooled the first week of February, but homebuyers are still very active.” In other words, despite the rising rates, homes are now sold ten days faster on average. 

By Julija A. February 18,2021

Google has finally announced its international partners for its $75 million small-business support fund. As a result, numerous companies from Europe, Latin America, Africa, Indonesia, the Middle East, and India are now waiting to receive much-needed aid for overcoming pandemic-related challenges.   In March last year, Google stated it had dedicated over $800 million to help businesses, health organizations, and several governments push through the hardships of COVID-19. As part of that relief program, the latest reveal contained the names of organizations it will be partnering with to deliver $75 million in investments to small businesses outside the US.   The European Investment Fund (EIF) is to receive $25 million in loan capital - the second-biggest share of the aid package. $15 million will be allocated to more than a thousand small European businesses, and EIF’s Life Sciences Fund will be awarded another $10 million to support around 200 life-science companies.   In Latin America, Google partnered with the Inter-American Development Bank to make $8 million available to small businesses. On the other side of the world, Kiva - a crowdfunding organization that operates within ten countries - is set to distribute a $26-million loan initiative throughout Indonesia, the Middle East, and Africa. Kiva will also receive an extra $1 million to invest into its local-partnership program.   According to Google’s press release, India is to receive $15 million for small and micro-business investments. The remaining million has been allocated to the Ogen-Israel Social Loan Fund and used to provide low-interest loans to small companies facing pandemic-caused hardships in Israel.   These loans are bound to create opportunities and alleviate hardships for businesses operating from these countries. On the domestic front, Google has already partnered with the Opportunity Finance Network (OFN), delivering $90 million in loan aid to small US businesses to date.   So far, Google has provided $340 million in Google Ads credits to all small businesses with active Google Ads accounts. Another $20 million in Google Cloud credits were already distributed to academic institutions researching potential treatments and vaccines to help end the COVID-19 pandemic as soon as possible.

By Julija A. February 19,2021

The multinational corporation, Costco Wholesale, is planning on increasing its minimum wage in the United States to $16 per hour. Costco’s long history stretches back to 1976 when Sol Price opened the world’s first membership warehouse club – Price Club. Several years later, Price Club’s executive vice-president of merchandising, Jim Sinegal, co-founded Costco Wholesale with Jeff Brotman. In 1983, the two enterprises merged and became the company we know today. On February 25, 2021, during a US Senate Budget Committee hearing, Craig Jelinek - Costco’s president and CEO - announced that the retailer would boost its workers’ minimum wages to $16. Jelinek also stated that more than half of the company’s 180,000 US employees earn upwards of $25 per hour and that the average Costco employee earns around $24/hour. According to The Wall Street Journal, the retail chain raised its starting rate from $13 to $14 per hour in 2018, adding another dollar less than a year later. Costco’s latest increase puts it ahead of its competitors such as Amazon and Target, whose minimum hourly wages are still $15 per hour. Despite all these positive changes in the retail industry, the world’s largest company by revenue, Walmart, persists in maintaining its payments at $11/hour. President Biden’s $15-minimum-wage proposal offered some hope in these troubled times, as it was supposed to be included in the $1.9 trillion COVID-relief stimulus package. However, the suggested increase recently suffered a significant setback due to an unfavorable ruling by a Senate official, so the future of America’s workers remains uncertain. For now, Senate Democrats are looking into alternative methods of providing the wage increase: The options include tax credits for small businesses if they pay their employees higher hourly compensations or penalties for large corporations that avoid providing their staff with the specified sum. At the moment, the federal minimum wage is $7.25 per hour - a woefully inadequate amount in the 21st century due to the steady climb of living costs. Fortunately, many states have adopted their own minimum-wage laws, of which some more than double the federal amount. In his address to the Senate Budget Committee, Jelinek also said: “I want to note: this isn’t altruism. At Costco, we know that paying employees good wages and providing affordable benefits makes sense for our business and constitutes a significant competitive advantage for us. It helps us in the long run by minimizing turnover and maximizing employee productivity, commitment, and loyalty." Jelinek didn’t specify whether Costco supports the minimum wage hike, but when asked if he would support a bill that mandates a federal minimum wage of $11 per hour, he responded with: “11 dollars? It’s better than $7.25.”

By Julija A. March 03,2021

Governor Greg Abbott announced Tuesday he's dispensing with the mask mandate in Texas, even though health officials warn not to wind down virus restrictions. The rollback has been issued following the increased availability of vaccines and a drop in the number of COVID-19 cases and hospitalizations. However, health experts emphasize the possibility of another surge and warn of more lethal variants of SARS-CoV-2. Centers for Disease Control and Prevention guidelines still advise wearing masks, especially in the state where the virus has killed more than 43,000 people. Even though the numbers across the US have recently been rapidly falling, the death toll remains high, averaging 300 per day. Not only health authorities reacted; president Joe Biden intervened on Wednesday, blasting Abbott’s decision as “Neanderthal thinking,” warning that the pandemic is far from over. This decision made the biggest impact on retailers across the country. Following Abbott’s announcement that businesses will work at full capacity beginning March 10 and the announcement of the rollback of the mask mandate, retailers were left in awe. They worry it’s too soon to ease safety restrictions and don’t plan to make any adjustments to their safety measures. Big retailer chains and supermarkets still insist on customers wearing masks to protect their staff. The decision to stop masking around others can jeopardize the grocery stores around the country and reverse the gains Texans have worked so hard to achieve, they believe. Most of them won’t allow maskless customers nor employees, following the guidelines from CDC. Jason Brewer from the Retail Industry Leaders Association called Abbott’s decision a “premature mistake that will put retail workers in a vulnerable position” in an email statement for CNN. The National Retail Federation released a statement on this, encouraging customers to continue wearing masks in stores nationwide. The spokesman for NRF insisted in it that “retailers are private businesses, and it is within their right to implement and enforce policies that protect the health and the safety of their employees and their customers.” The decision to scale back virus restrictions amid the pandemic caused turmoil and controversy among retailers and customers. It’s yet another tryout for them, and we’ll see whether businesses will be able to strike a balance between survival and safety. Let us hope that Abbott’s decision won’t undermine everything that has been done so far in terms of protecting Texans against COVID-19.

By Julija A. March 04,2021

The online payment processing company Stripe saw its valuation surge to $95 billion after it raised $600 million in a recently-concluded funding round. That makes Stripe the most valuable startup in the US. Businesses use Stripe’s software to process payments. Its main competitors are Paypal and Square, while some of the company’s top customers include Amazon and Lyft. Like other payment providers, a shift towards online shopping fuelled Stripe’s growth and attracted more investors. This trend has only been accelerated by the coronavirus pandemic. In an official statement, Stripe unveiled plans to use the new round of funding to expand its European operations and invest in its Dublin headquarters. Out of the 42 countries where Stripe currently powers businesses, 31 are in Europe. In the same announcement, the company revealed that its services will soon be available to millions of businesses in Brazil, India, Indonesia, Thailand, and the UAE. All of them are eagerly waiting to adopt this payment platform for their e-Commerce business. Stripe has an impressive number of industry leaders as customers, with 50 of them processing more than $1 billion through the platform. Its enterprise revenue is its main segment and is nearly tripling each year. The company recently started providing checking accounts to its customers and is working with banks such as Goldman Sachs and Citigroup.

By Julija A. March 22,2021

With IPOs turning into a fragile investment method and SPACs taking over, a change in crowdfunding rules is set to boost investment in diverse startups. The changes allow investors and founders to raise up to $5 million from crowdfunding, marking a significant increase from $1.07 million in 2020. This opens the door to new opportunities for startups that have so far struggled with raising funds the traditional way. Startups that have capped under previous rules can reopen their campaigns and test the waters with investment interests before filing the mandatory paperwork with the SEC. According to some forecasts, the new rules could pave the way for $1 billion in crowdfunding offerings in 2021. That’s a significant jump from the $250 million in the past year. Ever-rising interest in potential startup unicorns proved that $1.07 million was not enough to cover the needs of smaller companies. Regulation Crowdfunding has traditionally been the standard route for small businesses and under-represented founders in Europe to raise money. It allows entrepreneurs to set what they would like to offer instead of just equity - some of them offer interest-bearing notes or revenue-sharing agreements. Crowdfunding also allows regular people to get involved. The pandemic accelerated its evolution as it provides a simple route to funding. Several platforms offer people a chance to participate in the success of young companies struggling to get financing through traditional means. The popularity of Regulation Crowdfunding has increased from last year and is bound to skyrocket in 2021. Throughout 2020, startups have been using this method to raise funds, and Wefunder, a crowdfunding platform, reported a four-fold investment volume throughout the year. Namely, in February 2020, $2.8 million was invested in startups ranging from self-driving cars to next-door coffee shops, and in February 2021, it reported an $11.4 million volume. These are considerable amounts coming from both regular people investing $100 to angel investors “paying it forward.”

By Julija A. March 23,2021

Mortgage rates have continued to climb for the fifth week in a row, resulting in a nine-month high. The latest data released by Freddie Mac on the 18th of March shows that the average 30-year fixed-rate mortgage has jumped to 3.09%, the highest it has been since June of 2020. The 15-year fixed-rate mortgage followed suit at 2.40%. The 30-year rate was at 3.05% the week before, and it started 2021 at 2.65%. The 15-year rate started the year at 2.16% and was at 2.38% the week earlier. "As expected, mortgage rates continued to inch up but are still hovering around 3%, keeping interested buyers in the market," according to Sam Khater, a chief economist at Freddie Mac. While the rates for mortgages and refinancing have increased, they are still at historic lows. This has resulted in fixed-rate mortgages offering better value than adjustable-rate mortgages, which may see further increases as the economy recovers from the effects of the COVID-19 pandemic. Experts expect rates to rise throughout the year due to the expected economic recovery and stabilizing actions taken by the Federal Reserve Even though the Federal Reserve doesn’t adjust mortgage rates, the policies it enacts may influence them. The Federal Reserve has been buying bonds during the pandemic, and it has consistently spent $120 billion per month, which has had a stabilizing impact on mortgage rates. "Economic signs are pointing toward a post-pandemic return to normality, a welcome development as spring approaches. While we expect rates to remain favorable, especially in light of historical trends, the upward move is capping many buyers' budgets and trimming their ability to qualify for more expensive homes," George Ratiu, senior economist at Move, Inc, said. With record-low interest rates, 2020 saw a significant increase in mortgages and refinancing. Mortgages in the US amounted to $4.3 trillion, with $2.8 trillion consisting of refinancing. This is an all-time record according to a report from Black Knight, a mortgage monitoring company. However, between February and March, the number of homeowners for whom refinancing would be a sensible option fell from 18 million to 12.9 million.

By Julija A. March 25,2021