ARC Loans, SBA, Congress

Congress, doled out Major banks, JP Morgan, Citbank, totally failed banks, But when the time came for the Congress to pass a helping hand to small business, it asked that the small business be profitable. So it hard to get loans from Banks, from SBA. Americas answer to Small Business which need help, a gentle forget it.

September 4, 2009, 6:16 pm

The Official A.R.C. Outcry Begins

By Robb Mandelbaum

The frustration that Agenda readers have shared over the Small Business Administration’s A.R.C. loan program (see here and here and here) has finally percolated up to some of those responsible for fashioning it in the first place. On Tuesday, Senator Bill Nelson, Democrat of Florida, held a press conference in North Fort Myers, where, according to the North Fort Myers Neighbor, a weekly paper, he decried the dearth of A.R.C. loans in Florida as “appalling.”

Senator Nelson placed blame first on the banks, which don’t want to make the A.R.C. loans, he said, because they “can make a lot more money by making the small business owner borrow their money on their credit cards.” He also notes that big bailout recipients such as Citibank and Bank of America still aren’t participating. “That’s simply not right,” he said.

Fair enough, to an extent — as we’ve reported elsewhere, banks see too much effort for not enough profit in the program to make the loans. But then Senator Nelson attacked the S.B.A.’s implementation of the program. Its underwriting rules, he said, “are so stringent that very few businesses . . . can qualify. They say they have to be in business for two years but one of those years has got to be profitable. We’re in the middle of a recession — they can’t be profitable.”

Legislators like to kick around the bureaucracy, so Senator Nelson’s comments are not surprising. In this case, however, they are misdirected — he should be pointing his finger at his colleagues who drafted the provision, as well as those who voted for it. (The latter would include, incidentally, Senator Nelson.) It was Congress that insisted eligible business be both “viable” and “experiencing immediate financial hardship,” a practically impossible balancing act in which the S.B.A.’s profitability rule makes pretty good sense.

It was also Congress that capped the loan size at $35,000. Pair that with the strict accountability that lawmakers also demanded of stimulus programs, which is why the S.B.A. rules are so stringent, and you get a loan that is thoroughly unappetizing to banks. One could argue, I suppose, that the S.B.A. has overreacted to the political climate, but you can’t really blame it for that. The S.B.A. is caught in its own untenable balancing act: If it had been too generous with program requirements, instances of fraudulent lending would almost certainly have emerged, and perhaps those instances would have been widespread.

Then Senator Nelson, or one of his enterprising colleagues, would instead be holding a press conference decrying S.B.A. incompetence and calling for heads to roll.

Small Business , Big Bank

Do They Want Our Business or Not?

By Jay Goltz

I was watching TV the other night when an ad came on for Bank of America. It had a business banker — an actor, I assume — professing his dedication to small business. Now, I’m a Cubs fan, so I’m used to wanting to throw a shoe at the television. But this was worse; the Cubs at least try (I think).

Lots of the big banks do this, but Bank of America is the bank that bought out my local business bank, LaSalle, a couple of years ago. Many of the people I know in small business had used the bank for years. After Bank of America arrived, the old LaSalle went from being the bank for small business to being the bank for big small business. The term small business can refer to a $200,000 business — or a $200 million business. Overnight, the rules changed, the services changed, and the attitude changed. So did many of the employees, from the president down.

My own realization that I needed to change banks started with a little change — quarters, dimes, and nickels to be exact. I have a soda machine that we take the change from every couple of weeks. We had been taking it to the LaSalle branch down the street to have it counted in a machine. After the buyout, we were told the machine was broken. Really? They said we could leave the bag of change, and they would send it downtown to the main bank. We could then look for the credit on our bank statement. I later mentioned this to a friend of mine who works at a different Bank of America branch. He said he was at a meeting at which the branch managers were told to tell customers that the change machines were broken.

NewlyWeds\ Very Old, Very New

Somali man, '112', weds girl, 17

The couple posed for photos at the wedding celebrations

Hundreds of people have attended a wedding in central Somalia between a man who says he is 112 years old, and his teenage wife.

Ahmed Muhamed Dore - who already has 13 children by five wives - said he would like to have more with his new wife, Safia Abdulleh, who is 17 years old.

"Today God helped me realise my dream," Mr Dore said, after the wedding in the region of Galguduud.

The bride's family said she was "happy with her new husband".

Mr Dore said he and his bride - who is young enough to be his great-great-grand-daughter - were from the same village in Somalia and that he had waited for her to grow up to propose.

"I didn't force her, but used my experience to convince her of my love; and then we agreed to marry," the groom said.

Goat-skin documents

The BBC's Mohammed Olad Hassan in Mogadishu says the marriage, in the town of Guriceel, is being described by Somali historians as the first of its kind in the Horn of Africa nation for more than a century.

Our reporter says reaction to news of the marriage has been mixed.

Some people said while it was allowed under Islamic law, they were concerned about the age gap, but others were happy that age was not a barrier to love.

Mr Dore told the BBC he was born in Dhusamareeb in central Somalia in 1897 - and has a traditional birth certificate, written on goat skin by his father.

Our correspondent says he has an interesting history - in 1941 he joined the British colonial forces as a soldier for 10 years and then served as a police officer after Somalia won independence in 1960.

Altogether, Mr Dore has 114 children and grandchildren. His oldest son is 80 years old and three of his wives have died.

He says he hopes his new bride will give him more children.

"It is a blessing to have someone you love to take care of you," he said.