Smart Borrower Blog

Archive for the ‘Business Borrowing’ Category

Small Businesses Still Struggle to Obtain Loans

Even with government stimulus programs, small businesses are constantly struggling just to stay afloat. Small businesses help to create as much as 80% of new jobs, so this is dismal news for our struggling economy and especially our rising unemployment rate. Many small businesses have faced reductions in bank credit and it has been increasingly difficult for them to get a small business loan. Overall, they are struggling at record high rates. Could help be on the way? This week the Obama administration has a meeting planned that could brighten the future for the small business owner. Timothy Geither,... more »

Plans to Acquire a Small Business Loan May Still Need to Wait

If you were hoping that the news of the improving recession means it is getting easier to acquire a small business loan, you likely will have to wait a bit longer. News from Reuters today says that according to PayNet Inc, the number of small business loans that have gone into default, or are behind 180 days or more, increased between August and September. According to Reuters reporter James B. Kelleher, in September, .85 percent of business loans had fallen into default, up from .81 percent in August. There is good news, however, in that the number of small businesses... more »

Obama Promises More Help for Small Businesses

President Obama is not happy with the nation’s banks. They have been too stingy in lending money to small businesses in the past year, he says. The Federal Reserve backs up his statements, reporting that total loans from banks are down $476 billion since December 2008 and commercial and industrial loans are down $204 billion. Now Obama has a new plan to jump start more lending. Why more help is needed: President Obama in a statement Wednesday - “Small businesses have always formed the backbone of the American economy. The problem is, our small businesses have been some of the... more »

Banks to Bail Out the Government?

The Federal Deposit Insurance Corporation, the government agency that insures consumer deposits at banks, declared yesterday that its reserves are way down and that the fund it uses to protect bank deposits is now in the red. The solution: have banks prepay their fees for the next four years, including the current one, before the end of 2009. The FDIC’s money problems are a result of the many bank failures over the past two years. Back in June 2008 the agency had $45.2 billion in its fund, but after 95 bank failures in the first half of 2009 alone the... more »

Is Small Business Lending on the Mend?

A recent article on CNN’s website claims that the small business lending sector has begun to “heal itself.” Can this be true? Lending to small businesses all but stopped last year in the wake of other financial turmoil on Wall Street. Few investors wanted to buy up small business loans on the secondary market, so few banks wanted to make the loans. The government made big plans this year to bail out the sector, promising up to $200 billion in funds for more loans. What the CNN article says is that although very little of that money has been touched,... more »

Where’s the Small Business Help?

What is the real driving force behind our economy? Is it the big Fortune 500 companies or is it the entrepreneurs - the small business owners? If the President Obama’s philosophy is true that the economy grows from bottom up, then why has the government been focusing on bailing out Wall Street and not giving breaks to the backbone of America’s ingenuity and innovation? In a recent poll from Intuit Payroll reported in a CNN article, 75 percent of small business owners say they are not getting enough government support and that the opposite is actually true - the Feds... more »

Will America’s Recovery Capital Loan Program Work for Small Business Owners?

America’s Recovery Capital Loan program (ARC) will provide up to $35,000 in short-term relief for small businesses having problems meeting expenses. Small Business Administration (SBA) lenders are generating these loans, which will be available for small businesses until September 30, 2010. This $255 million loan program has been in effect for approximately one month. Some of the program’s detractors are having doubts about the effectiveness of the program. The SBA plans to approve $190 million in loans in 2009, and $150 million in 2010. The plan is to bail out 11,000 small businesses and retain 55,000 jobs. An article on... more »

What Are Banks Really Doing With TARP funds?

There have been 360 banks and lending institutions across that have received government funding from the Treasury Department’s Troubled Asset Relief Program (TARP). Have you been wondering what these financial institutions have been doing with your taxes? Well, a new report from the Office of the Special Inspector General, the oversight department for the program, has shed some light on that question. Apparently, 83 percent of these banks are using some or all of the money to make more loans, including things like commercial and residential mortgage loans, small business loans, and credit card loans. Yet 43 percent are using... more »

The End of Small Business Loans?

The End of Small Business Loans? With the announcement that CIT Group is in active discussions with its principal regulators on a series of measures to improve the company’s near-term liquidity position and now working with a law firm that specialize in bankruptcy dealings, small businesses may have been dealt another costly blow. CIT has been a major lender of small business loans, and its failure could mean an almost completely dry field for such loans in the near future. The New York Time Boss Blog reported that according to the most recent annual report filed with the Securities and... more »

Weak Small Business Rescue Plan Unlikely to Deliver Relief

Where is the government's promised help for small businesses, some of the hardest hit entities of this economic downturn? According to the Small Business Administration, the newly created "America's Recovery Capital Loan Program" went into effect on June 15, offering interest-free loans for as much as $35,000 to qualified businesses. This new loan program, made possible as part of the original stimulus billed passed by Congress in February, seems doomed to failure, however, from the very beginning. First, only a limited number of loans will be offered – 10,000 to be exact. Try to match that up with the more... more »