SOS: Send loans now
With bank lending to small businesses nearly frozen, these 8 entrepreneurs are among the thousands fighting for the credit lines and loans they need to keep their companies alive. How have you found dealing with the banks? Has your small business been able to land a loan — or had trouble getting one? Tell us about it.
From Common Sense Management Consulting, LLC Homestead, FL I work with small businesses to help with their development: profit margins, financial analysis; strategic plans, etc. I also assist our county in training small businesses. I have talked to over 1,000 of these since January. Not one has received a loan through the banks, SBA programs or micro lenders!
The owners are frustrated. They cannot get working capital. They are managing day-to-day. Many are likely to close.
From Mark Bahti My business has been around since 1949 (started by my late father) I have run it since 1972 – right on thru the recession of 82-83 (anybody in Cable news old enough to remember it??) Never late on a payment or loan, always paid more than the minimum and loans paid off before the due date.
But get a loan now? No way.
Why?
Banks will only say "we are risk-adverse"
I reply "So am I but I'm willing to deal with your bank anyway…"
I'll get through this most recent downturn but I will NEVER forget or forgive the banks and will do whatever I can to minimize my contact with them and the fees they are increasingly charging.
From Chris, Milford, Delaware We are in the same situation as many others. Started our business with savings and credit cards. We not have a profitable business and our business has doubled over last year. Yet, we cannot get a loan from local lenders because so many of these new government loans for absurd. You have to be a "struggling" viable business. What a crock. If we could only consolidate our debt- our monthly cash flow would be so much better. This country needs small business but we are not "Big enough to fail!".
From Manny, Concord, CA We have a subcontracting agreement with a company who is doing business with the federal government. They issued us purchase orders (PO) and our work will start soon. We need a loan for working capital and in order to hire more workers. We submitted these documents (contract and PO) to the banks who are approved SBA lenders but they come up with several excuses i.e., the company must be in business for more than 2 years (we are only more than 1 and 1 half year), credit score must be more than 670, that this ARC program will again bring us to another mess similar to mortgages, etc. In our situation this is one clear example of a small business trying to survive and helping in our own small way the economy (hiring more workers, etc) and yet our lending institutions are not helping inspite of the almost risk free (905 gurantee) SBA loan and the only reason I believe is that it's probably not pfofitable for them to get involved in this program.
We the small businesses have a great impact in our economic recovery since our efforts have multiplier effects. Suggest, the government open up this ARC program to other private institutions who are qualified and with determination and willingness to help us small busineesses.
From William G Stockglausner, Columbia MO SBA or any government backed loans require too many hoops through which to jump. The underwriters want this…the underwriters want that…screw the underwriters.
From Joe, Jacksonville, FL I have been thinking of starting my own firm within the same industry that I've had close to 15 yrs experience. I talked to the SBA affiliate who was useless. He promised me as my advisor, I would be "hearing from him alot" and he would be "helping me through the whole process" 2 months later I never had a single voicemail or email returned. I gave him my business plan to review and that was a month ago. I finally just went on my own to talk to banks on the advice of a differetn SBA counselor. They proceeded to give me a list of "SBA" banks and financial institutions about 40 listings long. 3 weeks later after calling this list, it's come down to 1 bank that is actually doing startup loans. The rest are not doing loans based on any number of excuses. The whole process in working with the SBA and their "resources" has been pathetic. If I need $75k, guess what I"m out of luck. Most banks don't lend to startups or they don't do loans under $300k or they don't loan over $25k or they want your first born for a $20k loan. My wife and I have been banking with Wachovia for over 10 years, starting as First Union and when I called them, the one girl never returned a call and finally after tracking the other down, I received an email explaining how difficult it is to start a business in this economy, how I probably wouldn't get qualified and how I probably wouldn't end up getting the loan. I have the right mind to go bank with the small local banks from now on. I'm still talking to banks but am not sure why. Yet, turn the TV on and all you hear is how the "stimulus" is helping. Guess what, FL was putting off accepting the stimulus dollars and the ARC loans are only for EXISTING businesses who already have loans out. Big Help!!!!
From Brina from San Marcos, CA We were an American success story in every sense of the word. My mom and I started selling our personalized gifts in 2001 after I lost my tech job post 9/11. We started selling hand painted ceramic platters that we fired in our home garage. Our overhead was low and the whole family pitched in to get the business going with me at the keyboard helm.
Life was good for several years. We grew into a 2400 square foot industrial space and hired two full time employees. I finally had the freedom to work on new product ideas and redesigned the boutique. We never lived above our means but we were able to take trips, live in a nice neighborhood, enjoy dinners out. I was also able to spend time volunteering in my community which was very rewarding.
I started noticing a big difference in sales in 2007. The trend from year to year had been up up up and starting in the Spring of '07, sales were leveling off for the first time in 6 years.
By Spring 2008, there was a big difference from previous years sales totals. I was a nervous wreck. No one was talking about a recession yet on tv and I was taking it all on my shoulders as my own personal crisis. I was losing sleep, walking in a permanent crouch and working day and night for a solution.
We learned we were expecting our first child in late October, 2008. While the news was thrilling, our big picture changed drastically. We had always thought that a sensible way to cut back on costs would be to let one or both employees go – my husband and I could pick of the slack until things improved. However, now that we had a baby coming in June 2009, we could no longer count on that extra income. We needed our work force – they have been with us for years and they have the experience to be able to help run the business in our inevitable absence.
Our employees know that the job market is weak. We asked them to please help us out by cutting back the hours they work. When they are done doing the absolutely necessary tasks associated with their positions, they are to take the rest of the day off. At first, this was a very successful move. We saved hundreds of dollars in payroll the first period. The next pay period, they worked close to full time. Now, a few months into it, they are actually working overtime! One of my employees has been coming an an hour early and they other has been staying late. They are quick to point out that they are hurting for money. I haven't been able to raise their wages for two years now.
I'm trying to see this situation as a god-send. I finally have the time to actually have a baby and the support to raise him. I am trying not to let the fear of the unknown get in the way of making smart business decisions. Most of all, I'm trying not to let this economic crisis crush my self esteem. I am, after all, more than my business.
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From Anonymous As a small business owner,we are paying credit cards and credit lines with high interest rates.We would like to consolidate to something that would bring our cash flow under control.with the cutbacks on bank lending,and SBA loans practically null and void,Do you guys have any suggestions?
From T. LaConte Pensacola, FL My Office Equipment Service and Supply Business did wonderful for 19 years. Then the economy tanked and our sales dropped 70%. I needed a consolidation loan to help get thru these hard times. Consolidating would have lowered my monthly debt and made us more profitable. I have pleanty of equity in the retail location I own, but could not even get a little 60k line of credit from the bank we've been dealing with for nearly 10 years. Other banks were just as reluctant. I finally had to turn the business over to my wife while I took on another job to make sure we didnt lose our home. The business is still there but it's just sustaining it self. We have not drawn a paycheck from it in over a year. In the mean time my hard earned money is being used to bailout the banks and financial institutions. If the Govt invested in the small business owner instead of the greedy bankers we could probably turn the economy around a lot faster.
From Anonymous we own 2 restaurants and can get no assistance except ccrds loans, and the rate is very high. We are now slightly behind on some payments which makes our credit scores go down..
I think it is important to help the small business person which is the backbone of this country. Need Relief in WV.
From Joe DiGiuseppe, Franklin, Kentucky We too are a small business doing work for automotive, commercial, industrial, food, and a little military. We are a production machining facility in Kentucky, near Nashville, TN. We are ISO9001 registered and have been in business for twenty years. We have had to borrow money to survive the downturn in automotive and the economy. We are in deep enough with our bank that they hope we pull through but, like many others, they have cut us off. I can't see that cutting us off now, knowing they have stimulus monies, and the government wants small business to succeed, and they are pushing for automotive suppliers to get aid, is better than helping us a little more to see us through than to stop and see us go under when they stand to lose 3MM plus dollars. We have a great track record but sales for EVERYONE is hard right now and we try hard every day. We also need assistance to get through…where do we turn when it looks like the stimulus plans won't actually help us?
From seth cherniak, mobile, al This is kind of a back end response. I own a dry cleaning/laundry business with two locations. We bought the first location (the main one with the plant) 8 months ago and the second a month ago. The initial purchase we financed with the bank and owner financing. The new acquisition was done with a small credit line from the same bank. We also asked for and got a credit line from another bank: three doors down from our store and the officer is a customer. Easy on both ends..sign on the dotted line..unsecured. Great rates.
Now..that being said..it took FOREVER to get a business credit card from a BIG credit card lender who ponied up a beggardly $5000 limit (which will last you about 15 minutes)and other credit cards that I have have been slashed to limits I haven't seen since my dad co-signed with me when I graduated from college.
My point..and I do have one..is that it was fairly simple to get north of $100K in commercial financing from smallish..relationship based lenders yet it was an act of God to get $5000 from a mage card company. We're not bad people. Its the mega institutions. They've gotten themselves into the situations they're in and now they're taking it out on us.
Screw the big institutions! Let 'em die like the dinosaurs they are. Forge personal relationships with the local George Baileys and we'll get through this okay. Good luck!
From Richard L. Ray, Crestview, Florida A pox on all of the banks that took TARP money and are now putting the screws to small business owners. We have financed our own operations from personal funds, tax refunds, and the stimulus package because no bank will loan money to us. Citibank cut our credit line with Office Depot because of "negative information" in our Dun and Bradstreet report. We contacted D&B and found there was no negative information on file. We found later that Citibank is purging its books of retail credit accounts. We're just a number.
As for this SBA emergency money for small business, it's yet another feel good program that does nothing to help the struggling small busines owner. I was discussing this matter with my attorney yesterday. If a small business can make it on its own, they can qualify for the emergency help. Our business, financed with our personal credit, our savings, and loans from tier three lenders at double digit interest can't qualify for a loan to reduce interest payments and consolidate debt. Some change we can believe in. This administration couldn't find it's collective hind end with a map, compass, and all hands.
From Siliqua Financial, Kent, WA Mr. Valla, I think our company can help. Give us a call at 1-877-859-2567 and ask to speak with Matthew. I look forward to speaking with you.
From H. Collins Boston, MA I have been denied twice by the SBA, the first time 12 years ago, was because my zip code was too good and this time it was because I had too many private investors, even though non of those loans are guaranteed. Does the SBA only help small businesses that are likely to fail??
From Irfan Valla San Antonio TX CNN I hope this post finds you well and you can help us get this story out. We are a small business, have been existent for 28 years, never made a late payment or defaulted on anything. Recently our 6MM mortgage matured and we were not able to pay off the loan, and banks were not lending. Our servicing agent and the trustee, whom is Bank Of America, will not give us an extension of the loan. Please keep in mind that we have made an additional 25k monthly payment every month and paid 200k for the 2009 taxes. We agreed on all their terms were still a producing asset however they know we have equity and would rather foreclose than extend the loan. We are forced to take a 15% hard money, the banks were bailed out but NO ONE cares about the small business owner. After 28 years of hard work and 40 loyal hardworking, taxpaying employees,we are on the brink of loosing everything. This is the best example of hubris and greed. The banks bought this note from the bailout money on the discount but instead of making moderate revenue they would rather foreclose and make millions more. We are just a small business and fighting the big players. Can anyone help us?
From Bill Saratoga Springs,N.Y. I too own a small business and although
we struggle,we are getting by for now.
I am fortunate not to have had to apply for a loan,so far.I feel very
strongly that banks do not like doing
business with small companies,except to take their deposits,and give nothing back.I believe banks are the main reason that most small businesses
fail,as they really cater to well established companies.After all,we small businesses can't go crying to the Feds for taxpayer dollars,when the
bank note comes due!It will only be when small business owners,organize
and pool resources,to fund their own
lending capabilities that small businesses and the economy,will take off like a rocket.Banks are not,and
will never be, in my opinion,small business oriented.We need a different
way,to be sure.
From Alex N We find that things are tight but there banks are still lending. Small regional and local banks along with credit unions are still signing off on deals with good credit and full documentation.
Alex N
http://www.smallbusinessplanresources.com
From Stuart Anderson, Raleigh NC I have a personal credit card thru Capital One. I've had this Mastercard for 2 years, never missing a payment (autopay) and always paying more than the minimum.
When I inquired to Capital One for a Small Business Visa Card, I was declined. When I received my denial letter in the mail, the reasoning was beyond my belief…1) No open credit/ balances too low!
I asked Cap One, "this didnt prevent me from obtaining your mastercard, why does it prevent me from obtaining the visa?" Again and as others have said, "No response from Cap One".
I was denied and that is the end of the story from Cap One. I have since applied thru my local bank and was APPROVED!
From Kris, Tampa Florida We have a retail store that has been in business for 10 plus years.
We carry a variety of products including mainstream clothing and party supplies and costumes but also carry adult novelties and gag gifts from risque to marital aids.
When asking Wachovia and Bank of America about lines of credit they just tell us that their policy is not to lend to business 'such as ours'. They also said when asked about the stimulus SBA packages that we would not qualify due to having any adult related products. When asked for more of an explanation they just quit talking completely. Dead silence until we ended the conversation.
Less than 20% of our product is adult in nature and we only collect revenue from retail products. We are a legal licensed and permitted business. We pay all of our taxes from the sale of all of our products regardless of the type.
We have been approved for an SBA guaranteed 7a loan. Variable interest rate only. SBA requires the lender to use all your assets as collateral even though the property securing the loan is worth $60,000 more than the loan.
While we will probably refinance in three years, this was our only option at the present time. A conventional mortgage was ni\ot available.