Finance Questions

1. 1

   Eight percent of small employers have been a victim of identity theft in the last three
   years. More than one in eight (14%) have encountered the problem directly when including
   those who think that they have been subject to a serious, but unsuccessful, identity
   theft attempt.
   

2. 2

   Forty (40) percent of small employers have checked their firms’ credit report in the last
   three years to determine the report’s accuracy. Twenty-four (24) percent who checked
   theirs complained to a credit bureau or credit reporting company about it.
   

3. 3

   Often, particularly in new and very small businesses, the owner’s personal credit report
   is effectively the business’s credit report. Sixty-four (64) percent of small employers
   checked their personal credit report within the last three years. One-quarter who checked
   complained about its accuracy. Thirty-four (34) percent checked both personal and business
   reports and 29 percent checked neither.
   

4. 4

   Credit scoring is common in small-business lending. Forty-two (42) percent of small
   employers claim to be very familiar with credit scoring and another 37 percent claim to
   be somewhat familiar. However, just 57 percent of those at least somewhat familiar with
   credit scoring think that their preferred financial institution uses credit scoring to make
   small-business loans.
   

5. 5

   Twenty-four (24) percent of small-business owners were required to calculate the Alternative
   Minimum Tax (AMT) for their last personal federal income tax return and another
   22 percent did not know if they had to or not. The large number that do not know is
   likely a function of paying tax professionals to prepare their returns. Of those who calculated
   the AMT, 53 percent paid it.
   

6. 6

   The money small-business owners take out of their business in the form of salary, profit,
   dividends, etc., constitutes 95 percent or more of their annual income in 72 percent of
   cases. The amount they take out constitutes 75 percent or more of their household
   income in 78 percent of cases.
   

7. 7

   While a slight majority (51%) of small businesses has a sole owner who obtains income
   from the business, another 34 percent have two owners who do. Nine percent have three
   or more owners who draw income from it. Four percent of small businesses provide no
   income of any type to any owner. One-third (32%) of small-business owners have other
   adult members of the household who also draw income from the business.
   

8. 8

   The median amount an owner of a small employing business draws from his/her firm in
   a year is about $72,500. At the extremes, 6 percent earn less than $12,500 and 5 percent
   earn $250,000 or more.
   

9. 9

   Forty-six (46) percent of small-business owners obtain 95 percent or more of their entire
   household income from a business. The median income of a household headed by a
   small-business owner is about $100,000.
   

10. 10

    Eleven (11) percent of small employers provide their employees some type of financial
    education beyond a basic understanding of employee benefits. Another 9 percent expect
    to do so in the future.

Volume 7, Issue 7, 2007
ISSN 1534-8326

William J. Dennis, Jr.
NFIB Research Foundation

• 1(financial education) Does your business currently:?
• 2Within the last three years, have you checked your business's credit records held by a credit bureau or credit reporting company to determine if those records are correct?
• 2aWithin the last three years, did you complain to a credit bureau or credit reporting company that your record was inaccurate or that there were incorrect entries in it?
• 2a1(credit records) To which company or companies did you complain?
• 2a2The last time you checked, were you very satisfied, somewhat satisfied, somewhat dissatisfied or very dissatisfied that your credit report as posted by a credit bureau was correct?
• 3Within the last three years, have you checked your personal credit record to determine if it is correct?
• 3aWithin the last three years, did you complain to a credit bureau or credit reporting company that your personal record was inaccurate or that there were incorrect entries in it?
• 3a1(credit bureaus) To which company or companies did you complain?
• 3a2How satisfied were you with _____’s response to your complaint or complaints? Were you:?
• 3a3The last time you checked, were you very satisfied, somewhat satisfied, somewhat dissatisfied or very dissatisfied that your credit report as posted by a credit bureau was correct?
• 4In the last three years, have you been a victim of identity theft?
• 4aHow many days was it between the time you were victimized and you first recognized it had happened?
• 4bDo you have good reason to believe that in the last three years someone tried to steal your identity?
• 5Are you very familiar, somewhat familiar, not too familiar or not at all familiar with the financial concept of “credit scoring”?
• 5aDoes your preferred financial institution use credit scoring to determine if its small-business customer’s loan application is accepted or rejected?
• 6When you last filed your personal income tax, did you or your tax preparer have to CALCULATE an Alternative Minimum Tax (AMT)?
• 6aDid you have to PAY an alternative Minimum Tax (AMT)?
• 7Will 95 percent or more of your entire personal income for the year come from salary, dividends or profits from this business?
• 7aWill 75 percent or more come from salary, dividends or profits from this business?
• 8Are there other adult members of your household who draw a salary, dividends, or profits from this business?
• 8aWill you draw more income from the business than any other adult member of your household?
• 9How many owners of this business in total are there who will draw a salary, dividends, or profits from this business this year?
• 9aWill the other owner/owners receive more, less or about the same from the business for the year as you will?
• 10Does your total income from this business for this calendar year, including any salary, dividends, draw or profit taken out, likely to be:?
• 11Does your individual income FROM THIS BUSINESS account for 95 percent or more of your entire household income?
• 12Is your total household income from all sources for the year, including income from other adult members of the household, likely to be:?
• 13Small-business owner household income.