[Thewoodman]

I was talking to my banker today and he told me about the America's Recovery Capitol ARC SBA loan. It sounds like something that could actually help out us contractors.

It is basically a interest free loan up to $35,000 dollars. Here is a link for more info http://www.sbaarcloans.org/

I have an appointment with my banker on Friday. I will let you all know how it goes.

Mark

 

[Thewoodman]

Here is a better link with more info. http://blogs.reuters.com/small-business/2009/06/08/sba-announces-new-arc-loan-guidelines/

Mark

 

[nitram]

Not to burst anyone’s bubble, but this ARC thing is a joke. Like most things the government is doing these days, it’s mired in bureaucratic red tape and banks are having a difficult time disbursing these loans due to an insane amount of paperwork and BS.

I do volunteer work for SCORE, so I’m familiar with these loans, but I’m not an expert like an SBA rep. First of all, you have to be an existing business for more than two years, but they’ll favor longer than that. Second of all, you have to show through tax records that you were profitable the past 2 years, and not just a penny into the black, but actual profits. Being profitable the last 2 years is the only thing that makes sense in the program. The rest is just a quagmire that will more than likely result in government noose around your neck.

But honestly, if you can pull off getting your bank to do one of these loans for you, and it makes sense for you, then go for it. You’re paying for it with your taxes anyways.

 

[gene2]

Yea it is a load of "newspeak". I read the SBA guidelines posted about a month ago and it is confusing because they seem to want you to be able to pay your bills while not being able to pay, etc. My daughter's drywall company really needs the help and she has been very actively pursuing, our local banks hadn't even heard of it and her e-mail today indicates their bank now knows of it but is seemingly confused as to what documents & procedures to request. I'm glad she has the tenacity to pursue it so that maybe I can learn whether or not my HVAC company can get some help. She is pretty good at interpreting mumbo-jumbo. If I can survive this winter I would rather not have to deal with this government "1984 newspeak" that is growing daily. I don't know why things can't be clearly stated other than to use the regulations to mean whatever the powers that be want them to, political party doesn't matter, just confuse the masses.

 

[nitram]

Hey Mark, I was curious as to how your meeting went with your banker?

 

[Solardave]

Man

Thanks for the info.I'm calling my banker on Monday!

 

[Mike Finley]

Not to burst anyone’s bubble, but this ARC thing is a joke. Like most things the government is doing these days, it’s mired in bureaucratic red tape and banks are having a difficult time disbursing these loans due to an insane amount of paperwork and BS.

I do volunteer work for SCORE, so I’m familiar with these loans, but I’m not an expert like an SBA rep. First of all, you have to be an existing business for more than two years, but they’ll favor longer than that. Second of all, you have to show through tax records that you were profitable the past 2 years, and not just a penny into the black, but actual profits. Being profitable the last 2 years is the only thing that makes sense in the program. The rest is just a quagmire that will more than likely result in government noose around your neck.

But honestly, if you can pull off getting your bank to do one of these loans for you, and it makes sense for you, then go for it. You’re paying for it with your taxes anyways.

Yea it is a load of "newspeak". I read the SBA guidelines posted about a month ago and it is confusing because they seem to want you to be able to pay your bills while not being able to pay, etc. My daughter's drywall company really needs the help and she has been very actively pursuing, our local banks hadn't even heard of it and her e-mail today indicates their bank now knows of it but is seemingly confused as to what documents & procedures to request. I'm glad she has the tenacity to pursue it so that maybe I can learn whether or not my HVAC company can get some help. She is pretty good at interpreting mumbo-jumbo. If I can survive this winter I would rather not have to deal with this government "1984 newspeak" that is growing daily. I don't know why things can't be clearly stated other than to use the regulations to mean whatever the powers that be want them to, political party doesn't matter, just confuse the masses.

This might seem like a harsh system, but why loan money to somebody in financial trouble? Statistically they might as well light the money on fire if they loan it to businesses in financial trouble.

Lenders want to loan money to companies to help them expand not cover operating expenses.

 

[gene2]

Have you read the SBA guidelins on this? As far as lending to companies in trouble look at the banks, AIG, GM, Chryler etc. This is supposed to be the little guy's bailout to help ride out the recession.

Yes, traditionally SBA loans are to help with expansion but right now, in many markets there is nothing to expand into unless taking over a competitor.

I do not desire to start a flaming war, sorry if my previous post appeared that way. An intelligent exchange of what everyone looking at this finds out may help. It seems right now the bankers have very little info & guidance. It always is a help to ask the right questions.

 

[Framer53]

This might seem like a harsh system, but why loan money to somebody in financial trouble? Statistically they might as well light the money on fire if they loan it to businesses in financial trouble.

Lenders want to loan money to companies to help them expand not cover operating expenses.

Expected losses are in the 35% range!!!!!!!!!!!!!!!!!!!

 

[nitram]

It’s definitely a loan for covering operating expenses, which is obviously a dumb thing to do. That’s why it’s for $35k and not like a $100k; it’s pretty hard to significantly expand a business for less than $100k. However, they’re only giving the loans to businesses that have been profitable for the past 2 years. That definitely makes this dumb idea a lot less stupider. The rational for that is because, if you were profitable the last 2 years, then odds are you’re doing something right, and you won’t totally flush the money down a toilet.

This ARC program is not even a drop in the bucket compared to the bailouts. The total amount of loans being disbursed $250-million. It’s a very small amount, which is primarily why the loans are so small to begin with. So, $250-million divided by $35k equals 7,142 loans. Get em while you can, because this arc will sink long before the recession is over.

 

[carolinahandyma]

I spoke with two different bankers about this recently. They said they were only doing these loans with existing customers that had either a business loan or line of credit already open.