Proposed Changes by LA City Council to Expedite Permitting for Small Businesses

Small businesses in Los Angeles have, for a long while, been facing many difficulties in getting started. Local and city-wide ordinances make it a very long and expensive process to open a new business, especially a restaurant or similar establishment. The main complaint among those trying to get their foot in the door is that they are required to work with and submit paperwork to various departments within the city government that don't necessarily work closely together. In several instances, an aspiring business owner worked with one department for a while to get their plans approved, only to find out from another department that their plans will be rejected due to insufficient parking. Fortunately, according to Amy Edelen's L.A. Times article, members of the Los Angeles City Council are looking to introduce a new plan to make the process faster and easier for all parties involved.

Even for restaurants that already exist, the renewal of a conditional use permit, which is required to get a liquor license, can take a year, between actually submitting the documentation and waiting for it to be approved. Councilman Mitch O'Farrell has taken the first steps toward speeding up the process, by proposing a plan that would create a new department in the city government designed specifically to deal with small businesses and create that connection between all of the other departments. O'Farrell believes that the new department will be beneficial because it will allow new business owners to sit down with a representative of City Hall and spend just a few minutes planning out a checklist of all of their requirements and an approximate timeline.

Too many potential business owners have been forced to give up before ever opening. Small businesses contribute greatly to the economy, so if the process isn't improved, more potential employees will be laid off and new jobs will become much harder to find. Even renewing a permit can be a tiresome and costly process, especially in areas where rent is high. If the permit takes a while to be approved, the business owner is forced to pay rent for months when the business isn't open or making any money. While representatives from the Department of Building and Safety claim that the permitting process isn't nearly as long as people complain, others claim that the delays are due to the convoluted nature of the various departments. With O'Farrell's plan, at least some of that confusion should be resolved, which should help to speed things along.

Even if a business already existed on the property, if the business changes from an office space to a retail establishment, under current regulations, a "change of use" is triggered. That means that the entire process of starting a business has to go back to the beginning as if the original business had never existed. While most of the complaints about the process are related to new restaurants, analysts hope that the new rules will help all small businesses to get their start. O'Farrell believes that the initiative will make the process more straightforward, and as long as it is approved by the City Council, the changes are expected to begin by the end of the year. As O'Farrell said, "Behind every empty storefront, there's a story." Hopefully, the City Council will approve his plan and help make those stories into realities.

***************************************************************************************************
Find out more about us at www.sepulvedaescrow.net. Any Questions? Contact our Escrow Expert! Sepulveda Escrow Corporation (818) 838-1831. Follow our company on Facebook, Twitter, LinkedIn, and Google+.

***************************************************************************************************

CFPB Proposes New Regulations on Payday Loans

In an attempt to avoid situations in which borrowers get stuck in an endless cycle of debt, the Consumer Financial Protection Bureau (CFPB) released a set of new proposals this Thursday to regulate the market for payday loans and certain types of credit known as being "debt traps." James Rufus Koren, in his L.A. Times article, discusses the new rules and the effects they may have on the economy.

A payday loan is a special type of loan with very high interest rates that is made on the condition that the borrower will pay it back as soon as they receive their paycheck. Unfortunately, according to CFPB Director Richard Cordray, lenders often make the loans knowing that borrowers can't pay them back and will end up stuck in a never-ending cycle of debt. The new rules aim to limit the number of loans a consumer can take out in a year and make the lenders review the finances of potential borrowers much more thoroughly before making a loan. In a healthy credit market, lending and borrowing money should be a win-win situation. Both parties, not just the lender, should benefit from the transaction, and that is the situation the CFPB is trying to remedy.

Lenders have been outraged by the proposed changes, claiming that it will make their business more costly and will cause most of their loans to become unprofitable. The CFPB has responded that it isn't looking to put lenders out of business. Rather, the organization is trying to make sure that customers don't get stuck in debt traps, where they pay off a loan just to find out that they need to take out another loan to have enough money for day-to-day living costs. The new regulations will force the lenders to do in-depth analysis on income and living expenses to determine whether they will be able to make the payments every month without running out of money.

Already, the CFPB has enacted similar regulations for banks and mortgage lenders, but payday lenders may be right in complaining that the new rules are unfair or insensible. Many claim that the process will add time and cost, which hurts everyone. Under current practice, a borrower can walk into a loan branch and leave 20 minutes later with a $250 loan. A detailed analysis of "take-home pay" and expenditures would probably add a lot of cost in the form of fees, which could drive away potential borrowers. Those borrowers could end up going elsewhere to find their loans.

It is likely that the new regulations will naturally stop some people from getting loans. Some people worry about where those people will have to turn to make ends meet. Perhaps some will be forced to get a handle on their finances and will end up much better off in the long-run. Others will have to go to pawn shops or family members for help. Still others may turn to installment lenders, which are not covered under the new rules. The installment lender gives much larger sums of money, with smaller monthly payments over a long period of time, but the borrowers often end up paying more in interest on the loan than the actual value of the loan itself. Analysts believe that the regulations will help somewhat, but only in that they will stretch the debts out onto a longer time line, rather than reducing such debts altogether.

***************************************************************************************************
Find out more about us at www.sepulvedaescrow.net. Any Questions? Contact our Escrow Expert! Sepulveda Escrow Corporation (818) 838-1831. Follow our company on Facebook, Twitter, LinkedIn, and Google+.

***************************************************************************************************