Business BLOG

Many small business owners have been disappointed when their applications for small business loans were disapproved by banks under the Small Business Administration’s program for America’s Recovery Capital. According to an article written by Robb Mandelbaum in the August 12, 2009 edition of The New York Times Online, “the program is off to a slow start. ” It seems that most banks are reluctant to approve applications for small business loans. Mandelbaum reports that the Small Business Administration’s program has $255 million to give away, enough to give small businesses 10,000 loans reaching as much as $35,000 each. However, two months after the program was launched, there have only been 1,127 small business loans released, with a total of $36. 8 million. Sources are saying that banks are not very keen on participating in the Small Business Administration’s program because giving the small business loans would not be very profitable for them. Paul Merski,. chief economist of the trade association Independent Community Bankers of America, said, “There’s not a lot of profit motive in a $35,000 loan stretched over six years. ” Bob Seiwert from the Center for Commercial Lending and Business Banking at the American Bankers Association reveals that, because of strict underwriting standards, servicing the small business loans becomes even more expensive. The banks have also found more ways to restrict the approval of small business loans with the Congressional restrictions on loan eligibility. According to Congress, in order to qualify for the Small Business Administration loans, small businesses need to be both struggling and viable. That means the business should have had an “immediate financial hardship” such as a 20 percent decrease in revenue. However, the business must also be at least two years old with proof of positive cash flow in one of the previous two years. It should also submit a two year cash-flow projection proving that it will be able to afford loan payments. Because of the Congressional restrictions, banks are more likely to approve small business loans from their existing clients. Merski said, “From a financial perspective, it really is a loan that makes sense for an existing customer. You’re not going to have to put out a lot of resources to do a very costly underwriting. You know the business. ”Those who are working in support of small businesses are very much disillusioned. An example is Alex Cooper who is a counselor at the Pima Community College Small Business Development Center in Tucson. He said he had assisted almost 30 small business owners with their loan applications but none of them had been approved. “It’s a disappointment. I thought the banks would be more interested in the community and try to help small businesses,” he said. When the applications for small business loans are disapproved by banks under the Small Business Administration’s program for America’s Recovery Capital, small business owners still have another option. They can get the equivalent of small business loans from their credit card services. Credit card services provide their clients with the ability to accept payments through credit cards or debit cards in person, online or through the phone. Clients who have established a certain minimum in average monthly credit card sales are qualified to apply for cash advances that are like small business loans. Payments are automatically deducted from future credit card sales. If you are a small business owner, you do not have to go through the hassles of applying for small business loans with banks who are reluctant to participate in the Small Business Administration program. Get your trouble free small business loans from your credit card services instead.

Many small businesses have been disappointed when their small business loan applications rejected by banks in a program the United States Small Business Administration to rebuild the capital. According to article 12, Robb Mandelbaum August 2009 Edition, The New York Times Online ", the program has been a slow start. "It seems that most banks are reluctant to approve applications for small business loans. Mandelbaum says that the program is the Small Business Administration is a 255 million U.S. dollars to give away, it is sufficient, 10,000 loans to small businesses reach $ 35,000 each. However, two months after the program starts, has had only a 1127 Small Business loans to large, a total of 36 dollars. 8 million. Sources say that the banks are not very interested in participating in the program, the Small Business Administration's, which offers small business loans would not be very profitable for them. Paul Merski,. Association chief economist of Commerce, Independent Community Bankers of America, said: "There are a lot of profit $ 35,000 loan, spread over six years. "Bob Seiwert Center commercial loans at commercial banks and the Bankers Association of America shows that, since the strict underwriting standards, servicing small business loans is even more expensive. Banks have also found new ways to restrict the approval of loans to small businesses Congressional restrictions on the eligibility of the loan. According to the Congress in order to obtain Small Business Administration loans available to small businesses is a viable fighting. This means that the company should have "a direct financial difficulties," such as the decrease of 20 percent of revenue. However, the company also must be at least two years of age, proof positive cash flow together with the previous two years. You must also be given a two-year cash flow of the structural elements that may be able to make loan payments. As the Congressional restrictions, banks are likely to approve loans to small businesses to their current customers. Merski said: "The economic point of view, which is in fact a loan makes sense for existing customer relationships. You do not need to put a lot of resources, so very expensive insurance. You know the business. "Those who strive to support small businesses are very disappointed. An example of Alex Cooper, Advisor to Pima Community College Small Business Development Center Tucson. He said that he had helped the nearly 30 small business owners for loan applications, but none had been approved. "It is disappointing. I thought that the banks would be interested in community and tries to help small businesses, "he said. If a small business loan applications rejected by banks, the Small Business Administration program, the United States to recover the capital, owners of small businesses still have a choice. They can be responsible for small business loans, credit card services. Credit Card Services offers customers the ability to accept payments via credit or debit cards in person, online or by phone. Customers who have been set up at least monthly sales average credit card information are qualified to apply for cash advances, which are small loans. Payments are automatically deducted from the sale of credit cards. If you have a small business, you have to go through the hassle to apply for loans to small businesses that banks refuse to participate in the Small Business Administration program. For the smooth small business loans, their credit card services.