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About The Battalion. (College Station, Tex.) 1893-current | View Entire Issue (Sept. 7, 1983)
Page 14/The Battalion/Wednesday, September 7,1983 Consultant helps small businesses United Press International NEW YORK — U.S. consum ers are picking up the tab in higher interest rates for risky foreign bank loans but imposing onerous controls on such lend ing could be more costly in the long run, according to one eco nomic authority. At mid-year 1982, U.S. bank loans to all developing coun tries, including East bloc and OPEC nations, equaled $131.3 billion, or about twice total capit al of $66.2 billion. Loans to non- OPEC LDCs were $108.2 bil lion. “There is no free lunch in economics,” said Robert E. Weintraub, senior economist for the Joint Economic Committee of Congress in a study entitled International Lending by U.S. Banks: Practices, Problems, and Policies. “Loan funds are scarce re sources,” and when too much is lent out additional funds can be obtained only at higher interest rates. Therefore, he said, the loans to developing countries “raise interest rates above what they otherwise would be and crowd out lending to all other borrowers.” Banks made loans to most de- PISC Cepheid Variable presents Alien 7:30 and 10:00 Rudder Theatre .50 Eggs JPLITT theatres CINEMA I# 315 (»llt» Mwlti >46-8714 "MAN WHO WASN'T THERE" 10:00 "FRIDAY 13th” 7:45 BOTH IN 3D 7:45 - 9:50 ' fV “NATIONAL LAMPOON VACATION” (R) 7:30-9:40 “HERCULES” (PG) » CINEMA III Post O.ik Mali rf 1500 Harwy load 764-0616] 7:30-9:30 “STAVING ALIVE” (PG) J •8:00-10:00 Xf “STRANGE BREW” (PG) ft >3 RISKY BUSINESS” (R) veloping nations, but many “allowed their loans to Mexico and Brazil to reach worrisome levels in relation to their capit al,” he said. But Weintraub believes re cent legislation that, among other measures, limits a bank’s lending to individual countries, is not a satisfactory response. In deed, he said, the legislation could impose too high a cost on restructuring any loan, “possibly preventing the timely resche duling of loans to financially strained countries.” “Broadly speaking, there are two ways to make certain that banks act prudently in making loans to LDCs,” he said. Regula tory restraint “would, by defini tion, limit foreign loan exposure (but) would not necessarily promote diversification and safety.” Across-the-board country limits on foreign lending, for ex ample, could prevent deserving foreign loans from being made and place banks at a competitive disadvantage with nonbank financial institutions. “But the political implications would be especially serious,” he said. He referred to a Joint Memorandum to Congress by the nation’s chief bank regula tors that “lending limits based on subjective judgments that change over time are likely to have capricious and abrupt effects on the flows of credit, im ply a degree of foresight on the part of regulators that may not be realistic and be difficult to administer fairly while avoiding political implications.” Full freedom to lend abroad and especially to reschedule out standing foreign loans is parti cularly important now, he said. He suggests instead a more efficient balance between reg ulation — enough powers already exist — and market in centives; making banks pay fed eral insurance premiums based on the size and safety of their loan portfolios and making that information available to deposi tors and shareholders. Foreign loans Imag. costing U.S. Laws Now you know United Press International The population of Oregon is composed of fewer native Ore gonians — 1.16 million — than people born outside the state — 1.34 million. SANDWICH SHOPPE FORMERLY SCHMALTZ’S CULPEPPER PLAZA NEXT TO GODFATHER’S CALL IN ORDERS WELCOME 693-8276 OPEN 11 A.M.-9 P.M. 950 Pitcher of Lite OR with purchase of two sandwiches Regular Pitcher price $H 50 OR ALL SANDWICHES $250 FROM 5-9 P.M. .M S C. $ SCHULMAN THEATRES H MON-FMLY NITE SCH.a TUE-FMLY NITE MQM Ap(-.it; cinema presents 'a story of chance BEING THERE * WEDNESDAY 7:30 p.m. RUDDER THEATER DUSTIN HOFITOAN Tootsie FRI. & SAT. 7:30 & 9:45 P.M. RUDDER THEATER Roger Daltrey Ann-Margret Elton John TOMMY FRI. & SAT. MIDNIGHT RUDDER THEATER Charlie Chaplin United Press International DALLAS — Frank Northcutt specializes in solving the prob lems of small businesses. Since 70 percent of all small businesses fail, it isn’t hard to find prob lems. Very often, consultant Northcutt finds, the problems are the fault of management. “It’s not inept management,” he told UPI, “but a misdirection of the manager’s time,” a con centration on the phase of the business in which they are most talented to the neglect of other areas. An experienced cook, for in stance, starts a restaurant that serves fine food. But the re staurant closes its doors in less than a year because the location was bad, because the waiters and waitresses were poorly trained, because he couldn’t meet the payroll. An outstanding salesman starts a retail store. Although he is able to move merchandise, the store folds because he didn’t understand cash flow and he didn’t understand pricing. Northcutt, who teaches at the University of Texas at Dallas, has been called in by financial institutions and by the Small Business Administration to help in turnaround efforts for trou bled firms. He listed four major reasons why small businesses fail: —Undercapitalization. “I find a lot of them really do not plan what their minimum capit al requirements are . A lot of failures could be circumvented by more careful planning . It’s something a lot of independent entrepreneurs do not like to do. They may be good visionaries but very few like that type of detailing.” —Lack of sales. What may be classified as lack of sales in a business failure, Northcutt said he has found often is improper markup. “They either don’t mark up enough to have an asking price that will allow them to cover their costs, cover their risk, and cover the cost of (borrowed) money. Or sometimes they will not know the facts, mark up too much — and then they’re not competitive.” —Bad management, espe cially bad financial manage ment. Some managers don’t know how to read and interpret the financial reports peculiar to their business, Northcutt said. “Worse yet, some don’t even have adequate records. They don’t know how to keep records or when they do set them up they aren’t maintained as well as they should be.” United Press Internal Interpreting the r« >AN ANTONIO properly is vital, Northcun meowner frustrated “Figures are the language) )W d s sa *d he woul business, any business. I[ odlights to block can’t interpret them, then rted image of the Vii cannot manage a businestfj his g ara 8 e door, lively.” —Cash flow. Northcut small businessmen often4 me of Candelat io ( understand cash flow,the to have enough cash on cover operational expense! as rent, taxes, payrolls ai( surance. “That cash flow problei a lot of small businesses As business can live withoutpi for a period of timebutitcj live without cash. Abusim increase profits and in sales but still go broke hej cash lags behind." Some entrepreneurs again and again. “Someu unless they have been vet) aware or are very objective,! go back and make thesamt takes again,” Northcutt sail Large crowds flocL ring the Labor Day view the Virgin Mary iich is an apparent r the bumper of a ca xt door. “We’re getting sick , this,” Gutierrez said ’ Expectant mom rides city bus to hospital United Press Internatioul URBANA, Ill. - Crank had plenty of hold her hand when shew the hospital in labor—eva riding the city bus with ha her husband. “The bus is the only trail tation we have,” Mrs. C said. So when she wiffl labor Saturday, sheandhei band jumped a bus toad paign shopping center; transferred for the 50-ceit to the hospital on thefarsi the twin cities. Bus driver DougWeava led for an escort from died paign Fire Department n squad and headed nonsia but gently over the through the red lights fori Foundation Hospital, s He got Mrs. Crank thei six hours to spare, tn turned to his regular f| drop off his other five gers, none of whom seei mind the detour. “They thought it was kit neat when it was all over, said. The hospital said Mrs. and her 8-pound boy botlr doing well Monday. everytt items in nr before! See S| fV V, 4' \\ v ; ikW i - Don't be left out of the book! MODERN TIMES g SUNDAY 7:30 P.M. RUDDER THEATER $1.50 with TAMU I.D. Advance tick ets on sale at MSC Box Office. Also 45 minutes before showtime. PROBLEM PREGNANCY Are you considering Abortion? Confidential Free Pregnancy Testing & Referrals Call •’viii. (713) 524-0548 Houston, Texas The Aggieland yearbook save Crosc 2patt 3 PRgSENTS ^T Freshmen Sophomores Sept. 12-16 19-23 26-30 Oct. 3-7 Paviilion 10-14 Paviilion Juniors Nov. 7-11 14-18 Nov. 28-Dec. 2 Dec. 5-9 Paviilion Seniors, Grad, Vet, Med Oct. 10-14 / 17-21 24-28 Oct. 31-Nov. 4 Paviilion Chelsea' is a d toned flowers ai with polyester 1 Cuddle Up' rev< full-size comforts Queen-size com King-size comfor Iwindust ruffle, r< Full dust ruffle, rec Queen dust ruffle King dust ruffle, re Pillow sham, reg. Draperies, reg. s 5 TKE PARKER HOUSE st. rg ANDREWS CHURCH OLD COLLEGE MAIN Photographs will be taken at the Yearbook Associates Office at 1700 S. Kyle behind Culpepper Plaza. Office hours are 8:30 a.m.-4:30 p.m. During the weeks Oct. 3-7, Oct. 10- 14, Oct. 31-Nov. 4, Dec. 5-9, photographs will be taken at the Paviilion on campus. For more information call Dena L. Brown at 845-2681. DOWNTOWN BRYAN TEXAS (NORTH) Sat. 9/3 After game (ihemeiess) Thurs. 9/8 8:30 (Neuvo wavo) Sat. 9/10 8:30 (Golf Party) A ALL PARTIES AT TKE HOUSE MORE INFO: PAT: 693-9681 KEITH 822-795SI % Dillard 's monday thr