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Court Decision Supports NFIB Civil Forfeiture Reform

August 4, 2016

The Michigan Court of Appeals has ruled that current civil forfeiture laws wrongly require plaintiffs to post a bond before they can petition a court to hear arguments on their rights to have impounded property returned to them.

In declaring this requirement unconstitutional, the Court has sided with legislation supported by NFIB and introduced by State Representative Peter Lucido (House Bill 4629) that would repeal this bond requirement. The Michigan House passed the bill and it now awaits action on the Senate floor.

Civil forfeiture laws allow the government to seize private property from a citizen or small business owner without ever charging them with a crime or providing evidence prior to seizing the assets. Government authorities (typically police departments) often pocket the proceeds while providing no prompt way to get a court to review the seizure.

There is no incentive or requirement for the government to charge the business owner with a crime. Once the property is seized, government agencies are free to keep the property until the business owner pursues return of the property. This is often a costly and lengthy legal process that is stacked in favor of the government.

Many small business owners carry large cash sums to the bank and to other business locations for use in making change or deposits and other small business owners still use cash to make large supply purchases. All of these and other scenarios create a situation where small business is exposed to the potential of civil forfeiture seizures.

Photo: NFIB.com

Small Business Supports Further Civil Forfeiture Reforms

December 28, 2015 • Last Edit: June 13, 2016

Small Business Challenges in 2016

Small business owners in Michigan want to see more reform of the state's "civil asset forfeiture" laws that would restrict the seizure of private property according to the results of a question asked on the 2016 NFIB/Michigan State Ballot. Last year, Governor Snyder signed legislation pushed by NFIB that included new reporting provisions to track civil asset forfeiture seizures.

The legislation raised the standard of proof for seizing assets from a "preponderance of the evidence" to a higher "clear and convincing" standard. Now, NFIB members want to carry the reforms further in 2016.

When asked on the 2016 State Ballot: "Should Michigan's laws on Civil Asset Forfeiture be changed so that private property is seized only after a criminal conviction is secured?" 74 percent of NFIB small business members said "Yes", 12 percent said "No" and 14 percent were "Undecided".

While we applaud Governor Snyder and the Legislature for passing much needed reforms to Michigan's civil asset forfeiture laws last year, small business owners still believe the current laws lack due process and need to be changed so that private property is seized only after a criminal conviction is secured.

NFIB also supports recent legislation introduced by State Representative Peter Lucido (House Bill 4629) that would repeal a requirement for a property owner to provide a cash bond before they could contest a civil forfeiture seizure of their property. The House passed the bill before the spring break and it now awaits action in the Senate.

UPDATE: House Bill 4629 has passed the House and been reported from the Senate Judiciary Committee. It is now on the Senate floor awaiting further action.


Should Your Small Business Go Into Debt?

By Kristen Lund • August 08, 2016

Debt gets a bad rap - so much so that finance personalities such as Dave Ramsey have built their brands and careers around encouraging people to avoid it. However, other financial experts, such as Shark Tank's Kevin O'Leary, believe going into debt can be a smart move for small businesses.

Not sure if borrowing money is right for you? We talked with two business owners who offer differing perspectives.

Stephen Sheinbaum, founder, Bizfi in New York City

"Debt is one of many tools that entrepreneurs can use to build their businesses."

Taking out a loan is a good idea when a business owner needs money for remodeling, expansion, equipment or other major expenses but has exhausted personal capital or money from friends and family, says Stephen Sheinbaum, founder of an online platform that pairs small businesses with funding options. "Debt is one of many tools that entrepreneurs can use to build their businesses," he says, "and no single tool can do everything a business needs to grow."

One advantage of debt is that many different options are available to match a business owner's needs, Sheinbaum says. For example, large investments such as property acquisition can qualify a business owner for longer repayment terms. (Bonus: Prompt debt repayments will boost your credit score.)

Debt also provides advantages for business owners who don't want to relinquish control to investors. "Equity funding can seem like an attractive option, but it means you will be taking on investors who will want to have a say in what your business does, and that won't work for everyone," Sheinbaum says.

Even though Sheinbaum believes borrowing can be a smart move, he does have words of warning. "you can, and should, use other people's money to help grow your business," he says, "but only if your financials and cash flow analysis show you will be able to repay it without compromising your operations."

AJ Saleem, executive director, Suprex Learning in Houston, Texas

"In the end, after debating, I decided going into debt was not worth it."

AJ Saleem considered borrowing money to expand his business but decided against it. "Going into debt with the current low interest rates was tempting," he says. "In the end, after debating, I decided that going into debt was not worth it."

Saleem says lessons learned from troubled companies such as SunEdison and Linn Energy, which recently filed for bankruptcy, have steered him away from debt. "These companies loaded up on cheap debt but ended up paying too much money for all their purchases and defaulting on their loans," Saleem says. "If a business owner borrows money, it could definitely be too tempting to carelessly spend it away."

Saleem also says that unpredictable financial and economic events could spell disaster for a small business in debt. "If a business decides to borrow money and interest rates go up in the future, it could potentially end up paying a large portion of its profits to interest fees," he says. In addition, he says, banks can call back loans immediately. So, if a business starts to struggle during a recession, it may default.

Saleem ultimately decided to finance his small business by bringing in an investor and selling her a 20 percent stake in the company. "This allowed me to expand operations without going into debt and possibly being forced into default," he says.


As the Minimum Wage Increases Robots Might Start Replacing Workers

By Joe Dixon • August 3, 2016

Mandated pay bumps are forcing business owners to turn to some unconventional employees.

Goodbye, cashier. Hello . . . machine?

As more cities around the country adopt higher minimum wages, businesses are finding ways to reduce the cost of doing business. Among those strategies: replacing employees with automated systems.

About 70 percent of firms surveyed in the Duke University/CFO Global Business Outlook said higher minimum wages would incentivize them to pursue automation,
Computerworld reported.


Fight for your rights as a small business owner.

The Orange County Register reported that in another study from the University of California, Berkeley, researchers estimated that New York would lose 40,000 jobs to automation as a result of the state's $15 minimum wage.

In the restaurant business, 38 percent of owners are considering labor saving technology to reduce labor costs, according to QSR magazine. The shift from man or woman to machine already can be seen in certain U.S. cities.

In San Francisco, where the minimum wage is gradually rising to $15 an hour by 2018, entrepreneur Benoit Herve, CEO and Founder of Le Bread Xpress, serves up French baguettes with the help of only a vending machine. Herve loads the machine with partially baked dough, and once a customer purchases a loaf, the machine finishes baking the bread and dispenses it to the consumer for $4.25.

"When the government hikes the minimum wage corporations change the way they make things replacing workers, who are now more expensive, with machines which usually become more efficient and less costly over time," Forbes reported.

Getting replaced by a machine is just one of several unforeseen setbacks for employees due to an increased minimum wage. Employers grappling with a higher minimum wage, in addition to a new federal overtime rule going into effect Dec. 1, 2016 have been getting creative to stay in the black.

"If employers cannot stay in business while paying their staff more, they will either hire fewer people or give their workers fewer hours," the Washington Post reported last month.

 

 

 

 

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