Small biz loan failure rate hits 12%
A report on the Small Business Administration's loan guarantee program shows a sharp jump in the default rate. Have you had trouble getting or paying a loan?
From Garrett Washington, DC I am a small business owner with stores in Las Vegas and Washington DC. I took out a $700,000 dollar loan for my Vegas location with a 7 year payback. We opened in April of 2008 and every month since than the Vegas economy has gone down. The bank has been good enough to let us pay interest only for the last year. Our payments have been around $4300 per month and we are current. They now want the premium to start raising the rate to more than $12,000 per month. I met with the bank this week to discuss extending the loan to a 20 year loan with interest and premium our payment would be just $850 more than the interest only we have been paying now for a year. We were denied because the property we used for collateral has gone down in value and the stores did not profit this year. It is the first time my DC store did not turn a profit in 5 years. Why would a bank not realize that if an operating company has been able to make $4300 payments for the last year in this awful economy that they will have no problem paying an extra $850 per month as things are bottoming out. Instead they want to kick in the Interest and Premium payments which will surely put us in Bankruptcy and show a bad loan on the books. We also went to PNC whom has our Merchant account for 5 years and they wasted my time by saying no at the very first meeting even though I have put over $3,000,000.00 through this bank since we started doing business with them. What happened to common sense and why is it that the credit reporting agencies are not Government regulated. This is insane. All this talk about freeing up lending and they just kept our money and refuse to lend it to us. They got free money at some outlandish interest rate and still wont lend it to Americans with operating money making businesses. What happened to change President Obama. It looks like the banks still run Washington if you ask me.
From james, Dallas Texas SBA Loan Guarantee Another Pork Barrel Project Gone Awry
The SBA is willing to guarantee loans up to 90%, sounds great to small struggling businesses that are growing in an economic downturn. But what no politician tells you is that the banks stipulations will prevent a business from getting the money. Here's how it works: Banks make bad loans (bankers aren't businessmen); The Administration bails them out; Bankers and Banks get money interest free form the Feds; Bankers can then turn around and loan at 7% to their best customers; But there are 850 or more Preferred SBA Lenders; But since a business doesn't know if that bank is on the FDIC watch list, a business can start the loan process and then find out later that an SBA lender can't loan the money to the business because the FDIC has filed a cease and desist order on the bank; Busineses can't get that info because Financial institution info like that is privileged; and so no loan to business; but the bank can collect fees without loaning money; Business doesn't get money bank makes money, SBA is happy because many loan apps
From Charlotte,NC Hello, We are a commercial financing company.We provide non-traditional funding.The types of deals banks can't do.If you have a real business with assets and a real plan we can help.We have many programs to chose from.Does your business need capital for expansion or operating expenses we can help.Don't let this poor economy destroy your goals of having a profitable business.Email me at shawn@fisres.com.Let me know what you need.
From tracy adams Good day,
My name is tracyadams,I am a private money lender, certified and
guaranteed,you could get your loan from me as fast as you want it to
be,all you need to do is to fill out this as send it to the provided
email as soon as possible so we could start with your loan or you
could send us an email for more Inquires: tracyadamsloaninvestments@gmail.com
Name:
Address:
Phone number:
Date of Birth:
COUNTRY:
Occupation:
Amount of Loan:
Loan Duration Limit:
Get back to my e-mail as soon as possible.Have a nice day.
Best Regards,
Mr.tracy
tracy Secured Loans company
From Jeff Philly PA I've been in Non Commercial Real Estate Lending for 25 years and have recently been approached by a local community bank to develop an SBA 7A backed Mutual Fund. My thesis is complete and we are meeting with counsel next week. I feel for every small business owner as I have been self-employed for the last 8 years and had my $50M revolver yanked by American Express. I vowed to dissolve my business and use my lending and investment banking skills to try and help small businesses. This does nothing for you folks and I assure you 95% of all self proclaimed Commercial Lenders are clueless idiots especially at the Money Center Banks such as Wells, B of A, Citi and Morgan. I wish I had some words of wit but in the end I respect each of you. As I've always said self employment is like walking the high wire with no net.
From Elle, Chicago IL There are a wealth of merchant cash advance vendors willing to work with you. Navigate to 7dayfunds.com and utilize their funding wizard, it will assist you with determining exactly how much money you may qualify for.
From LONDON Hello Applicant
We are private lender located in United Kingdom we give out urgent loan at low interest rate of 3% our loan is affoundable to all in need of loan.
Are you eager to secure funds for that dream project of yours?
Do you have a viable business but lack the necessary finances to get it off it's feet?
Do you have ideas which worth millions but you lack the necessary capital to put your idea to test?
Have you been turned down by other lenders?
Do you desire a house but you lack enough cash to acquire it?
Do you want your dream car now and yet you can't, just because of your financial status?
rodney ford lending firm is granting you the opportunity to actualize your dream.
If you are interested in obtaining a loan,kindly contact us through the below email address for your loan request:
desmondlee16@yahoo.com
phone: +447035984243
From Jennifer Tampa, FL My family owns and operates a flooring business in Florida. The business was established in 1986. We have had an excellent reputation in the community. A few years ago we were ranked 49 of all flooring stores in America. Now, since the turn of the economy, our sales have decreased from $20 million a year to $4.5 million. We are struggling just to make payroll each week. We have laid off over 50 employees in the past two years. We are in desperate need of a loan. Our bank has removed our line of credit and we have been turned down for a small business loan. What other option is left for us to keep our business open?? The new $35k loan would certainly help just a little.
From RSS, Riverside, CA I was looking to vent my frustrations to a denied SBA loan request I had made with Wells Fargo for $150,000.00.
I have a Truck accessory business that has run profitably for 19 of the last 20 years. http://www.strongstruckaccessories.com.
I have been a flawless business and personal customer of Wells Fargo for 17 years with an personal credit score of 720. So when President Obama said the government would waive fees and back the loans 90% I thought the time had come for me to expand upon my business and to prepare for the inevitable rise of the economy. But the problem IS that there are some young, business green, and lazy loan officers that stand between us and the oppotunity that Obama has given us. After emailing me a package of forms to fill out and Business plan to make, I was told that when they were all returned filled out, with my tax returns I would be notified to his (cause there was only ONE guy doing the Wells SBA loans)decision. HE SAID BECAUSE THERE HAS BEEN A DROP OFF IN SALES IN THE LAST TWO YEARS, he didn't feel comfortable underwriting the loan. WTF!!!!!! I brought up the RECESSION, my 17yrs with the bank, I tried to see what other reason he might have…Sorry it just wasn't going to happen!!!! I am left gutted, and realise that the intentions & vision of Obama are not the same of my Bank…
From RSM, North Carolina I think TARP funds should have been given to Small Businesses… we keep the markets flowing with payroll, purchasing & taxes. After 20+ years in buisiness we had to cash in what little was left of our retirement investments to survive on. Hopefully SBA funding will be significant & forthcoming very soon.(this is a disaster & should be treated as such) Stress test? we're living it and outraged to see the 'mighty' be able to maintain their extravagance after a government bailout when I had to pay our taxes on an 18% credit card to a bank that probably has off shore tax shelters.
From Tim Monroe, MI One poster wrote:
"Let’s entertain an idea that might actually work. The TARP money should not have been given to these big corporations. It should have been put back in the pockets of the citizens. We would have stimulated the economy. We would have created jobs, paid debt to vendors, bought equipment, vehicles, paid our mortgages, etc. You, “the supposed experts” have started at the wrong end. I’m no ivy league educated, economic expert but I think the AIG situation proves this theory beyond a shadow of doubt.
Thanks for nothing Washington."
Wow, then what you are saying is that supply side, trickle down economics really does work. Of course it does!! Because government does not create jobs, you people do!
From Steve Reed, Vashon, WA We are a very small business, just three years old and on the verge of making our first profit. Then Bank of America takes away our credit line before we can use it. We are only four employees and I don't see any assistance for businesses as small as ours.
From AMPlady, Dulles, VA I really admire the endurance of these struggling business owners. My predicament is pretty "normal" – working to finance a home business which has taken a loss over the years; this, partly due to having to work PT outside of my self-employment venture. Unfortunately, I may have to return to work FT, thus putting the business Dream on hold. Entrepreneurs are typically passionate individuals (who are more emotional about their venture than logical). It is vital to keep in mind that LOGIC dictates responsible use of income/finances. Working in the financial industry for several years, I understand that lenders have to have a BASIS for lending money. Lenders have learned to recognize risk factors; being overextended (high debt to income) is most definitely one of them.
If I can't show a viable way of returning money I borrow, I cannot expect an institution to take a "chance on me." I know from their perspective that it has to make sense. In my opinion, it is better to protect one's credit rating; from experience, I know that this means reducing (or avoiding) debt. Granted, most of us have so much invested – both financially and emotionally- with our businesses. Unfortunately, if we are asking for help to expand, we have to play by the rules of those with the CASH!
From Pat Lazure, Omaha, NE How do you know when to get a loan vs. boot-strap a venture from savings? I've developed a massive wiki newspaper called http://www.VillageVoyage.com (description below), & I've realized I need another 10-15K to supercharge the business. What should I do?
Village Voyage:
Village Voyage is an on-line social media company providing unique local content on places, events, and people who would be of interest to those associated with any of its 22,000 U.S. towns. It serves these communities much like an on-line newspaper, yet as a wiki, any of its readers are allowed to contribute content. Even in its infancy, with over 8 million pages, Village Voyage is the largest wiki in the world.
Village Voyage recognizes collaborative Web 2.0 technology as the most disruptive form of communication since the printing press. By providing town-specific content and other topical resources including local news, weather and classified ads; Village Voyage transforms people from content readers to content publishers; allowing local users to enhance their town’s pages by adding deep community content that interests them most (i.e. local politics, sports, classified ads, etc.).
From Brian Simmons I realize I may take some heat for this comment and my part in this SBA mess, but lets not forget that after Hurricane Katrina, SBA loans were given to survivors whose credit was fair or better instead of getting a FEMA grant to replace losses. I had been living off the small proceeds from a house sale and my income from an online business was less than 3,000 for the year – still, with that miniscule amount I was denied a FEMA grant and offered a SBA loan over $20,000 instead, and had to wait a year to get it! Against my better judgement, I took it. I was desperate at that point, not having any other means to get out of temporary housing and get back on my feet. Unfortunately, though I am obviously out of the shelter, I haven't been able to get financially stable since then, and have defaulted on my loan. It may be that others who were in a similar situation have defaulted and that's a contributing factor in the higher default rate. Just a thought.
From johnny blalock.atlanta ,ga. i am a black own business..a men and women shoe store.in business since 1982.i need @200.000.00 to keep my company.do to the ression i am not able to buy merchnadise so that the business can be sucessful.i am behind on bills and rent.my customers are telling me not to close the store.my ladies shoes start at size 8 to 14.medium and wide withs.i am unable to buy shoes and can not make money.merchandise is low.it is a great demand for tall girl shoes in atlanta,georgia. please help me with a loan so that i can keep my company. the name of my store is dean shoes.my name is johnny blalock.tel#404-755-0803
From W. Hatten South Bend, IN Wow, after reading all of these comments I feel a little better knowing that we are not alone. My feelings mirror most of all of yours on the current administration and the joke that they have become. "Change that we can believe in" gave way to the same old two faced political bull****. We have been denied an SBA loan just this week to buy a startup franchise in my area. We needed 50k of an estimated 160k total cost, credit score over 770, and were told "no" and that if we had applied a year ago, that not only would we have gotten the loan, that we would have gotten it and had it funded in 7 days or less. If the business model hasn't failed with other franchisees in the last year, and I am still a good credit risk, then what makes us such a bad investment? They still approved us for 25k automatically on just our online app and signature alone! While 25k isn't a whole lot in the big picture, it might as well be a lottery sized windfall to us right now, as it is preventing us from reaching our dreams. Thanks for letting us vent, and I hope and pray for all of us that this crisis will pass quickly and that Congress will get the comeuppance that they deserve. I know that WE WILL NOT FORGET when the next election comes around!
From Celeste Rich My story is the same as so many small business owners. NO deliquency but FICO going down because I would rather opt out than pay extortionist 35% interest to B of A and Advanta, which lowers my available credit etc. 3 year business serving rural Sierra County NM with product ONLY made in NM which managed to break even in 2008 after only 2 years even in bad economy. But no one wants to loan money, even though I need it to open online store and try and gain contract with Spaceport America for their gift shop. SO frustrating to keep getting shuffled off to someone else, because I never quite fit their program. SO angry with our Congress. I supported Obama but am FED up! And now they put so many rules and regs on the SBA bailout that many businesses who deserve a loan will not qualify!!! I'm mad as hell!!!!
From David, Immokalee, Florida Mr. Obama and the Entire Federal Government,
Guys in Washington must think the citizens of the United States are fools. We let you take our money and loan it to banks who had pushed dirty loans and mismanaged themselves and we have nothing to show for it. Do you realize they are not loaning our money back to us and they are giving “generic” and “nonsensical” reasons for not doing so?????????
I have been in business for 18 years. I own two small businesses in Collier County. I have banked with the same local bank for 18 years. My credit score is 765, no judgments or liens, no bankruptcy, $3,000,000.00 in paid off equipment and 30 employees.
I have applied for a business line of credit for working capital and payroll at the bank I have been with for 18 years. The bank denied the loan because I took a loss in 2008. They also took a loss in 2008, larger than my own. Who didn't? I pointed out to the loan officer that in 18 years I borrowed and paid back at least 30 different loans with them, never late on a payment. The loan officer replied "they don't care". I pointed out that my credit score was higher than 78% of all Americans, he replied "they don't care." In addition, I pointed out that I had $3,000,000.00 in assets to use as collateral and he replied "they don't care". I asked the loan officer what they needed to approve the loan, he said "they" want to see cash in your accounts. Doesn't it stand to reason that if I had cash on hand I wouldn't be asking for his high interest loan.
At the height of business, I employed, between the two companies about 60 employees. I now employee about 30. If the goal of the government is for the economy to recover, demand lending to qualified small businesses!!!!
I must include the fact that I applied for the business credit line at Bank of America and was denied because I was not an "account holder", I have also applied at Chase Bank because I have a credit card, mortgage and life insurance with this bank. Chase concluded that because I only showed a $7,000.00 profit in 2008, I did not show the means to pay the loan back. When asked if the economy was taken into consideration in reviewing my loan the loan officer replied “a little”. ARE YOU KIDDING ME? A once in a century economic crisis was taken into consideration “a little”.
President Obama and Congress, you must step up and review the lending practices the banks. Qualified business owners should not be denied for the reasons listed above. Did the Federal Government ask Bank of America, AIG, and JP Morgan Chase if they had “accounts” with the tax payers? Did the Federal Government ask JP Morgan Chase if they had taken losses in 2008? These were the questions I was reviewed with so they should also have been reviewed with these questions.
Washington, you need to wake up!!!!!!!!! My family and employees families will sleep and eat in a tent on the side of the road!!!!!!!!!!
This is the taxpayers money!!! My money, my employee's money, the United States money!!!! Someone needs to fight for the small businesses in the United States!!!!!
Let’s entertain an idea that might actually work. The TARP money should not have been given to these big corporations. It should have been put back in the pockets of the citizens. We would have stimulated the economy. We would have created jobs, paid debt to vendors, bought equipment, vehicles, paid our mortgages, etc. You, “the supposed experts” have started at the wrong end. I’m no ivy league educated, economic expert but I think the AIG situation proves this theory beyond a shadow of doubt.
Thanks for nothing Washington.
From Brina from San Marcos, CA My husband and I own an ecommerce store selling personalized gifts for special occasions. Our business has been growing strong since 2001. In 2006, our gross sales peaked at almost 700K. We have never borrowed a penny to run the business – starting with just $800 in capital. Starting last Spring, business began to get weaker and weaker. I decided to apply for an SBA loan with Bank of America as a safety net. Despite the fact that we have zero debt, low overhead and decent cash flow, we were denied. Wells Fargo denied us next. Unfortunately, each time, they run your credit and that counts against our credit. All we want is a safety net just in case we fall behind. We do not want to let go of our loyal employees.
From Chris Williamsburg, Va I wonder if anybody gives a damn about this. I have been forced to look in back rooms to find financing, which in time, will only make it more dificult to survive in small business. I own a business that does $5,000,000 in annual revenue and got turned sideways in this slowdown but b/c we showed a loss in 2008, we can't qualify for additional funding to keep working capital and vendors paid. What in the hell is Washington thinking? Bail out all of these failed firms and then they tell us we are not worthy.
From John Ingell, Denver Colorado SBA can talk all they want about minimizing fees and backing up to 90% of the loan. That only helps the banks and NOT the business owner. The value of the business is based on exiting the business too. The SBA up until March was the backer of small business loans to buy/sell a business as 70%-90% of the value of the business is based on the cash flow it generates and is called goodwill. SBA now has severe limits on goodwill that they never had before. They look more like a regular bank and thus one wonders, why have the SBA if Main Street bank does the same lending?
From Pete Lynch DeBary, Fl 32713 SBA drops 57%???? For me it dropped 100% even after I applied for an economic disaster loan when Tropical storm Fay hit central Florida.
They said I had too high a debt to income ratio to pay off.
NO KIDDING, I used my lines of credit and credit cards to keep open.
Then the credit cards rates were cut and interest rates raised to 30% plus.
I did everyting that was rtequired and then some.
My CPA had all tyhe required paperwork with I's dotted and TEE's crossed.
SHE thinks that I was discriminated against.
FEMA paid for flooded houses that should have had flood insurance and that flooded in 2004 with the hurricanes. Why wasn't I paid???
Any SBA supervisors want to comment?????
From John Macpherson, Hagerstown, MD. My wife and I own a small Tea Shop. We started as an on-line only business in 2005. We did $600.00 in sales that year. next ear – we did $ 6,600.00 (1100% increase!) in 2007, we did $ 21,000.00, in 2008, $ 32,000.00. Not huge growth, but steady growth. We've tried every local bank, the SBA Express Loan program, and private investors. No- go from anyone. The local banks say "There's no market for this type of business in Hagerstown" Well, about 70% of our sales are from the area, the rest are over the net – nationwide AND overseas! Granted, our personal credit is terrible – partly due to having to finance the business on our credit cards, and partly because I had to get a liver transplant in 2008 which closed us for a few months – even so, we STILL increased our sales over 2007's. So, why won't anyone help out a business that been growing steadily for 4 years(even in a down economy)? IF we could get a loan we could increase our inventory, hire one or two employees and do additional marketing thus getting more customers.
From David Reliford, Massillon, Ohio To those who say that they care about the Small Business Owners,
I have been in business for eleven years and I currently have an SBA loan that is fully extended. I employ 10 people and I have ran up credit card debt as well as other short term vehicles in an effort to maintain my staff. The ARC program would truly help me to bridge our current situation until business start to move again. We are a search firm and we have found a slow down that looks to be opening, but cash flow has dried up. It seems that there are more and more stipulations and changes to this program than there were when it was originally introduce in February. How soon will those in power get this done??
From David, Immokalee, Florida Mr. Obama and the Entire Federal Government,
Guys in Washington must think the citizens of the United States are fools. We let you take our money and loan it to banks who had pushed dirty loans and mismanaged themselves and we have nothing to show for it. Do you realize they are not loaning our money back to us and they are giving “generic” and “nonsensical” reasons for not doing so?????????
I have been in business for 18 years. I own two small businesses in Collier County. I have banked with the same local bank for 18 years. My credit score is 765, no judgments or liens, no bankruptcy, $3,000,000.00 in paid off equipment and 30 employees.
I have applied for a business line of credit for working capital and payroll at the bank I have been with for 18 years. The bank denied the loan because I took a loss in 2008. They also took a loss in 2008, larger than my own. Who didn't? I pointed out to the loan officer that in 18 years I borrowed and paid back at least 30 different loans with them, never late on a payment. The loan officer replied "they don't care". I pointed out that my credit score was higher than 78% of all Americans, he replied "they don't care." In addition, I pointed out that I had $3,000,000.00 in assets to use as collateral and he replied "they don't care". I asked the loan officer what they needed to approve the loan, he said "they" want to see cash in your accounts. Doesn't it stand to reason that if I had cash on hand I wouldn't be asking for his high interest loan.
At the height of business, I employed, between the two companies about 60 employees. I now employee about 30. If the goal of the government is for the economy to recover, demand lending to qualified small businesses!!!!
I must include the fact that I applied for the business credit line at Bank of America and was denied because I was not an "account holder", I have also applied at Chase Bank because I have a credit card, mortgage and life insurance with this bank. Chase concluded that because I only showed a $7,000.00 profit in 2008, I did not show the means to pay the loan back. When asked if the economy was taken into consideration in reviewing my loan the loan officer replied “a little”. ARE YOU KIDDING ME? A once in a century economic crisis was taken into consideration “a little”.
President Obama and Congress, you must step up and review the lending practices the banks. Qualified business owners should not be denied for the reasons listed above. Did the Federal Government ask Bank of America, AIG, and JP Morgan Chase if they had “accounts” with the tax payers? Did the Federal Government ask JP Morgan Chase if they had taken losses in 2008? These were the questions I was reviewed with so they should also have been reviewed with these questions.
Washington, you need to wake up!!!!!!!!! My family and employees families will sleep and eat in a tent on the side of the road!!!!!!!!!!
This is the taxpayers money!!! My money, my employee's money, the United States money!!!! Someone needs to fight for the small businesses in the United States!!!!!
Thanks for nothing Washington
From Richard Ray, Crestview, Florida The Patriot Express program is a joke, a feel-good program that makes it look like the government gives a damn about helping the veteran. My wife and I are both disabled vets, and we were turned down for a Patriot Express loan for equipment and startup capital. We have made our business plan work in spite of the so called "help" from the SBA. We have sacrificed our home, most of our personal assets, and lowered our standard of living to make our business work. We are now breaking even, no thanks to the so called help from Washington. The big banks are bailing out of the SBA lending, but Capital One is more than happy to loan a small business money at usurious credit card rates, and only after you have placed every asset at your disposal into hock.
I am still looking for this "change I can believe in". The only thing I am seeing from Congress and the Obama administration are more bailouts for businesses "too big to fail". Big business gets the gold mine. As usual, small business gets the shaft.
From Pete DeBary, Florida I'm a small boat business owner that has been turned down by SBA 5 times.
Starting in 2000.
My credit score was 770 and I had 4 homes to back up loans.
No one would touch me.
I also applied for an economic disaster loan after Tropical Storm Fay came through Central Florida. This loan was supposed to be non-contingent through FEMA and backed by SBA.
FEMA paid for flooded homes to be demo'd that were in a flood zone but wouldn't help me.
Said I had too high a debt to income ratio.
NO KIDDING. I used up my credit to pay bills and stay in business.
Now I'm in default to the sum of 140,000 in lines.
Chase and AMEX have pulled all credit and lines all other credit lenders reduced limits below what was a b alance so nopw I'm late , over limit and defaulted.
THANKS SBA.
P.S. I made 300,000 the year before and was on track to 30percent higher in 2008 as a 1 man operation.
My accountant says I was discriminated against.
I'm walking away.
From Merrill Needham, Charlotte NC Marilyn,
Great post. I myself am a small business owner who has been unable to qualify for an SBA loan. I own a real estate brokerage/property management firm in Charlotte, NC with my wife. Thanks mainly to the property management side of our firm we were not only profitable in 2008 but achieved near 300% growth. We have been in business for over two years. Just a couple of years ago we would have been a lock for an SBA express LOC. When I worked for BOA as a small business banker I originated loans for businesses that were no where near as successfull and had far lower personal credit scores than the 680 that is required of all guarantors today. None of these loans went bad. What happened?
First of all I think that the tighter regulations only tell part of the story. In 2005 a small business owner could walk into any Bank of America banking center and get a credit line pretty much on the spot. Last month, my wife and I went into a banking center, waited 20 minutes to see the Banking Center Manager, and he was unable to help us. By that I mean he couldn't even take an application. We were given an 800 number to call and ended up talking to someone who could only do an application for an unsecured line and when the subject of SBA came up, we were told to contact the local SBA office directly to apply. When we talked to a representative from the SBA at Chamber function the next day, she told us we could go to Bank of America to apply for the loan, and then suggested we go to a smaller community bank to apply. We are still trying to find someone who will even take an application for an SBA express loan. SBA express loans max out at 35,000 so we aren't talking big money here.
I think that this example illustrates a problem that there hasn't been much talk about. It's not just that the banks aren't lending. This is true, but just as troubling, there are fewer and fewer qualified people to talk to at the big banks. For years, BOA, Wachovia and others have been cutting staff levels to save money, cutting bonus payments to bankers (I'm talking about the people who make far less than six figures here) and not replacing people when they leave. Many of these loans aren't made because the business owner cannot talk to someone that can help on HIS time. When we as business owners want to talk about a loan or banking business, many of us need to get away from the office and would prefer to walk into a banking center to talk to someone. If we have to make a call or go online from the office, there is a much greater chance that we will get sidetracked to help OUR clients.
If all of the major banks here locally would staff up to 1999 levels over the coming year or so (and maybe even pay them like they did back then), you would be surprised at how much better things would work. Not only would would there be enough staff to help everyone without excessive wait times, but they would be far more efficient. Those poor pb's and managers are horribly overworked. Also, you'd be creating a ton of jobs for people who would probably buy homes (maybe using Bank of America for their mortgage), and spend money on local businesses making them more profitable.
p.s. If you were an investor and were told that your 35,000 investment had an 88% chance of earning 5% per year in this economy, you'd be a fool not to go all in wouldn't you? That is what the 12% failure says. 88% success.
From Tom P Tampa FL I dont know what else we can do, our business has excellent vendor relations, we've paid our bills on time. We are doing well and have a chance to expand, but cannot do it on credit cards. Without any help small business will remain just that —smaller and smaller. No banks will even talk to us about loans, we are amazed. To both George W and Obama just want to say thanks, we are all inDEBTed to you.
From Brelaun, Dallas, Texas Great post Marilyn. I am curious to know what criteria are used for a company to be deemed “creditworthy”. Businesses such as General Motors, Bank of America and Citi have all received stimulus monies? Are those companies considered “creditworthy”?
From Joanne Anderson, Oakland, California We have been in business 30 years. We work on D.O.T. projects and hire many people. Our line of credit was pulled late last year. Since then we have run up our credit cards and affected our credit rating. We have applied for loans, lines of credit, etc. NO LUCK. The sad thing is that we own our commercial property with a LTV of 50% and still could not get help. Our current project is ready to ramp up which requires more cash….this is a government contract. Where can I get help?
From Marilyn, Arlington, Tx CNN PLEASE RESEARCH FOR SMALL BUSINESSES WHO NEED ANSWERS…
What is the credit criteria for companies, states and others receiving money from the stimulus? Is it the same criteria applied to small businesses? Small businesses may not receive SBA loans if they do not have credit card debt and a high credit score. Why would credit worthiness be considered a top criteria.
Whoever approved this FAQ on the website "treas.gov" – Q/A for small business should be reprimanded. What a mixed message, wow.
See the treasury department's response to this Q/A…
What if I was already turned down by a bank in the past six months? Can I qualify for any of these new programs?
"You are eligible to apply, but you will need to provide updated financial information that is current within 90 days. Over the past year the financial position of many individuals and businesses has deteriorated along with the economy, making some unfortunately no longer creditworthy."
How dare the government promise to help small businesses and then place such restrictions on small business owner/s because they too were caught in this downturn as admitted to in the FAQ response…www.treas.gov.
I would like to see some thought given to some of these plans before public announcement or implementation.
Why isn't the D&B score used instead of individual scores for small business loan applicants? I know I may have limited facts but something within the SBA system is lacking.
From Christine E. Jones, Hope, Arkansas I've been in business since February 2005 as a sole proprietorship. Every since then I've tried to obtain a small business loan. The minimum I requested was $25,000 back in early 2006. The most was about $50,000. However, due the the fact a disability that I required in late 2000 caused me to be unemployed for an extended period of time and me now having to try and rebuild my credit, no bank has been willing to loan me the money. I don't have the collateral to put up. Yet, I can produce documents that indicate businesses willing to work with me if I can patent, trademark, and copyright my ideas. I am a minority (African American and woman), disabled small business owner who has 1 BA, 2 master's and almost a 3rd master's degree in Accounting. Yet, due to the fact I could not obtain employment, I started my own business. Now as an entrepreneur with many good ideas and the potential to create jobs, no one wants to lend me money. I need between $50,000 and $100,000 to further my business. As an individual and as a small business, I've always paid my taxes. And I try to buy American whenever possible. Yet, I am an American being denied of the "American Dream" over finances. Isn't there something President Obama can do for those in predictaments as mine that will allow me to acquire funding for my business? I even emailed the White House about the idea of some of the loan (a percentage between 15% and 25%) being required to be repaid via Income Taxes so the government/commerical lender/bank gets its money back. For example, if someone took out a loan in the amount of $50,000 @ 5% interest, then for 5 years, 25% of the $55,000 the money(that is equivalent to repaying between $13,750 and $15,000 over five years or about $3,000 per year) would be repaid during Income Tax time. The remainder setup on installment plans. I have many ideas if the government is willing to listen. I even thought up a plan where they could treat the loans like the subsidized and unsubsidized student loans. In this scenario, first time borrowers could receive the interest paid by the government on loans up to $25,000. Any loan above $25,000 the borrower pays the interest. Under this program, small businesses can have the opportunity to borrow up to $150,000 but not go over that amount. Perhaps require a class to be taken where grades have to be kept up (maintain at least a 2.5 GPA at all times) or make it mandatory for the financial statements to be reviewed each year. If these suggestions do not suffice, I can come up with more.
From STEVE ALLEN,COOKEVILLE TN I WENT TO MY LOCAL BANK FOR A LINE OF CREDIT (75,000).I ALREADY HAVE AN SBA LOAN THAT IS MORE THAN HALF PAID OFF AFTER TWO AND A HALF YEARS.THEY TOLD ME THEY COULD DO 50,000 THEN IT WENT DOWN TO 30,000 THEN THEY SAID SORRY WE CAN'T HELP YOU AT ALL.THE SBA ALREADY HAVE A LIEN ON MY HOME TO BACK THE ORIGINAL LOAN. MY BUSINESS IS NOT FAILING I JUST WANT THE COMFORT OF KNOWING I CAN PAY MY EMPLOYEES FOR THEIR WORK.
MY STORE SELLS POOLS, SPAS, POOL TABLES ETC.THESE ARE THINGS THAT PEOPLE CAN HOLD OFF ON BUYING UNTIL THE ECONOMY RECOVERS. NO THANKS TO THE BANKS, I'LL JUST CROSS MY FINGERS AND HOPE THAT THE SUN COMES OUT!
From michelle clover,sc I own a small business for 6 years now i went to the bank to try to get some help i have a credit score of 740 and assets to back the loan but was not approved .because we dont own the building the business is in they want every thing you might own and then some before you might be considered for a loan. all i wanted to do was conslidate some debt.into one payment.
From Trina Cedar Hill, TX I am the Owner and Executive Chef of a catering company in Dallas, TX.
Since November of last year our sales have been way off and not in a good way. Living day to day has been very scary for myself, my family, and my employees. The majority of them are low-income, at-risk young adults who I hired mainly to give them the chance to learn a field where they can be successful financially.
In September of 2006 I was forced to shut down my restaurant due to the impossibility of getting financing. Imagine the shock on my employees faces when the very person who was supposed to be an example to them was broke herself.
I met with several banks and they all told me the same thing, Sorry you don't have any established business credit. One bank required a co-signor which I found, who met all of the criteria, including credit score, and I was still turned down.
I don't understand how I am supposed to grow my business so that I can hire more people that really want to work and better themselves, if I can't get the financing to do it? I was so sad when I found out that one young man that use to work for me is now selling drugs and just waisting his life away. My little Cafe gave this young man a place to go and learn responsibility, integrity, how to get along with people, and valuable trade skills such as budgeting, inventory control, food preparation, accounting, etc.
I pray that this new deal will indeed remember the true hope of this country, the small business and give us the help we need.
From Gerry Hepper Evanston WY We are a start up business and have been in business 8 months. We have been trying to find a lender who will lend us $50,000 which would be collateralized by equipment we already have free and clear and some new equipment (truck) to expand our business. The SBA won't look at a loan that small and all the local banks want us to have been in business for 2 years before they will even talk to us. It is sad that a small business owner can't get a fully collateralized loan for $50,000 but AIG gets $31 billion without anyone blinking an eye. We are looking to expand and employ another 2 people but can't because of the credit fear that the banking industry is going through.
From Brent DeDear, Tyler, TX. We received an SBA loan in January of 2008. With it we purchased a business in the medical field. We actually bill Medicare through a contracted intermediary of our legislatures choosing. This intermediary has had so many software and computer issues, that they have literally choked off our cash flow for the last 5 months. From a customer standpoint, our business is flourishing even in these economic times, but ironicly the very Gov't that gave us the SBA loan is the same Gov't that is almost putting us out of business!
From Richard Brucker, Santa Rosa, CA My company went to the SBA to get a loan under the Patriot Express program, where the government insures up to 75% of the loan.
We financed out first year ourselves and effectively proved our business model works, therefore financing the risk out of the business model.
Even with that, the SBA balked at our loan…initially they were gung ho and then they came back and said the underwriters would not give us a loan because we have been in business for one year.
So if you use their logic, they would rather lend to a complete unproven business plan than to one that has been proven. I'm a veteran and I feel like I've been given short shrift on this one. big business are laying off and I'm hiring…I am part of the solution not the problem and I think I should get an SBA loan!
I got an SBA loand for $10000 to start a small business, which was doing well, butwent south at the end of 2007. I moved to Florida for a job and to continue the business there, but got hurt (broken ankle on the job, Put on workers comp. for five months. Could not work the business and fell behind on the loan. Did not pay for a while now collection agency is asking to pay the full loan back, but I do not have the money, The business is bust. I ask then to pay a monthly portion and they will not go along