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ARC Loans' Weak First Month

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Julie Feb 10, 2010 12:57 AM GMT This is a classic example of the difficulties of small business ownership with the typical chicken/egg scenario. If you have the cash flow and credit credit you don't need the loan because you have enough resources. If you need the loan, you don't qualify even if you have cash flow and have a viable business. The issue is that for small start ups/companies it takes years to establish business credit and even the SBA loans do not necessarily cover all business types. So most small business overleverage their personal credit to raise capital to make payroll and meet the business demands until their business can support itself or can get debt refinance through a bank. This ARC loan is supposed to be a bridge...but seems that there is not enough teeth to really make this a functional viable solution.
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William Nov 18, 2009 11:50 PM GMT This is a great example of the banks being supported through the U.S. taxpayer no matter what their credit score is, still paying the taxes regardless of our financial situations. The banks and the government is the worst at managing funds as this current recession is proof of. We the tax payer continue to support a non-supportive group of God awful business people who have mostly never been in a position to make a payroll, or for that matter supported themselves under difficult times. I have been in a CEO since I was 29 years old and an owner since then as well. I have started three companies from start-up ground up entities, and recently purchased a company that has been in business since 1953. I am very unhappy with our banking system and have used the SBA for over $2M in loans under the 7(A) program and paid both back in 36 months when they were only due in 7 years. I retired at 39 and now am 45 years old. I wish I had not purchased the company I bought in 2006 just because of the poor leadership that I have to deal with at all levels of government and the banks that uses my deposits to NOT LOAN money to the people who need it most. Wayne
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bill Nov 18, 2009 8:14 AM GMT Here's why ARC program has not worked and will not work. I am a lending officer at a small community bank.For $35,000 loan yielding 2% over prime, no bank will participate in the ARC program considering SBA's outrageous eligibility criteria, ton of paperwork, high default rate, potential for servicing hundreds of obvious bad loans, and time consuming effort for collection, liquidation and foreclosure. I had to deal with complaints after complaints for slow processing, 90% decline rate, and making customers prepare ton of paperwork for nothing.Last but not least, what bank in its right mind would want to lend to a failing business. Total waste of time, money, and resources.
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HARTSKO FINANCIAL SERVICES, LLC Oct 19, 2009 8:58 PM GMT John Tozziâ??s article pretty much answered its own question why ARC loans have had poor, weak activity: Because they do not work! Based on the credit terms Mr. Tozzi has described about how the ARC loans are structured, it isnâ??t at all surprising why very few banks would act as SBA agents here! With â??Purchase Order Financingâ?? done by Hartsko Financial Services, most of the business owners we see are at rock-bottom when it comes to credit score. These enterprises have exhausted most of their options to get financing. Despite these negative conditions and adversity, â??Purchase Order Financingâ?? enables many of these businesses to get through a buy/sell transaction. At the same time, Hartskoâ??s money is secure, because our collateral is the value of the merchandise, which we control to the point that we get made whole.Richard Eitelberg, C.P.A.
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Denise Sep 1, 2009 9:29 PM GMT We submitted our loan on 6/25 & was called by the bank today that SBA submitted a list of add'l documentation needed (after having submitted 3 yrs tax returns, authority to get copy of returns, & projections.) I thought the process was designed to be approved in 7-10 days. We have 3 employees (in addition to ourselves) & not sure we'll be able to survive another month.
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Tony Gottlieb Aug 22, 2009 9:13 PM GMT Why is it we keep hearing that small business is the backbone of the US economy and the jobs recovery and yet so far there is less that $40 million in ARC loans nationwide?That 40 million not billion.Larry Summers is so completely f.o.s. and no one in the administration has enough brains yet to see what this policy is creating.
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Jennifer Aug 20, 2009 7:11 PM GMT I got an ARC loan through PNC bank. Started on June 15th, got approved 1 week ago!It took about 100 hours of gathering & jumping through hoops since June 15th. This has REALLY set me back on my daily operations, and I would say that is my biggest complaint... that the things I did have control of quickly fell apart because I had to neglect them quite substantially to get the loan. I was surprised by the number of hoops I had to jump through, and they ended up wanting 2005 taxes despite only wanting 3 years at first. Obviously it was a relief to find out that I had been approved, but we felt from the beginning that our company was a perfect candidate for this loan.The principals credit score was below 730, btw. And my understanding from the whole process & from speaking directly with the SBA before June 15th was that the requirements for this loan in part are up to the discretion of the participating bank, and that the SBA just set up the beginning guidelines.
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Jeff and Liz Hall Aug 20, 2009 2:45 PM GMT Has ANYONE gotten this loan? My husband and I have yet to find anyone who has. Seems pointless to even try. If you have gotten this loan, can you please post here and let us know, thank you!
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macpat Aug 15, 2009 7:53 PM GMT please how can i start....
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Shannon Aug 14, 2009 1:06 AM GMT Well some may say I am bitter about the whole financial aide thing but we have exhausted every resource possible and there just isn't any help for people who are actually struggling. We have buried ourselves in debt trying to keep our business running, we made some bad decisions and we would like a chance to turn our bad into good but hoe exactly are we suppose to do that when the "programs" that are designed to help the financially weak are just for show, I mean if we had good credit and not a lot of debt we wouldn't need financial help would we??? This program is just another way for banks and financially sound people to get ahead, once I say the criteria I wouldn't even waste my time on the paperwork, it's no different than going to a bank and trying to get a regular loan.
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