| . |
|
SMALL BUSINESS : Small Business Loans : Want an A.R.C. Loan? Head to the HeartlandThe Small Business Administration recently began posting a list of banks making America’s Recovery Capital loans. The list, which is supposed to be updated weekly and is available here, makes for both interesting and depressing reading. Depressing, first, because it’s not very long. As I report today in an article about one restaurant owner’s (ultimately unsuccessful) effort to secure an A.R.C. loan, just 405 banks had made 1,127 loans as of Monday. (The list, published Tuesday, is slightly more current, and shows that banks have made 1,191 loans.) Recall that at the outset, some people predicted that the money would run out by the end of September. Also depressing because most of the names on the list will be unfamiliar to most readers. JPMorgan Chase is on the list, as are Wells Fargo and SunTrust. But from there, the national brands trail off. Of the 25 largest banks in the U.S. — which together control two-thirds of all bank assets — only eight have made an A.R.C. loan. The prediction made by Tony Wilkinson, president of the National Association of Government Guaranteed Lenders, that banks would face a public relations problem if they didn’t participate, appears not to have come to pass — or at least banks are willing to absorb the bad P.R. as the cost of not doing business. Despite that early claim, the major bank absence will not come as a surprise to Agenda readers, many of whom have complained about how difficult it has been to get an A.R.C. loan. But this next tidbit might surprise. It turns out that fully a third of the banks making A.R.C. loans — and one-third of the loans they’ve made — are in three states: Minnesota, Wisconsin and Iowa. Seventy-four of the more than 400 of A.R.C.-loaning banks are in Minnesota, 49 are in Wisconsin. Thirty-three are in Iowa. To put that in perspective: more banks in Iowa have made loans than in California, New York and Florida combined (together, however, the banks in the three big states made 77 loans to Iowa’s 57.) The SBA itself is at a loss to explain the disparity. Judith Roussel, the Illinois district director who is the acting administrator for the region that includes Wisconsin and Minnesota (as well as a tie for the fourth best-producing state, Ohio, and the sixth, Illinois) could shed little light. "I know in Illinois we have been very aggressively reaching out, and we’ve had a level of success, but banks are getting on board at different paces," Ms. Roussel ventured. "We have a very intensive lender contact program," said Joseph Folsom, Iowa’s district director. "Our goal is to have a personal contact with every institution at the main bank level at least once a year. Keep in mind, there are nearly 400 banks and over 100 credit unions." But, he allowed, the initiative is just as intensive in next-door Nebraska, where only 12 banks have made loans. Lt. Gov Barbara Lawton of Wisconsin was happy to claim some credit. She called The Agenda on Tuesday after hearing we’d been poking around. "One of my concerns in the context of this economic crisis is that small businesses were feeling left out of the Recovery and Reinvestment Act," she said. But she took note of its many provisions to bolster SBA lending. "And because all of it is first-come, first-served," she continued, "I thought my job is to make sure that Wisconsin businesses get at least their fair share." Ms. Lawton held road shows in cities and towns across the state, bringing together mayors and other elected officials, bankers, local chambers and businesses that found capital through various SBA programs. "Our job," she maintained, "is to get this story out." It’s also possible the disparity has less to do with outreach and more to do with the type of banks making these loans. A.R.C. lenders in Iowa "know their customer base, and know which customers will benefit from the program," said Mr. Folsom. "And these businesses are usually located right down the street." Mr. Folsom was of course describing the archetypal community bank, known for practicing "relationship lending." The swath of Midwestern and North Central states from Ohio and Michigan to Kansas, Nebraska and the Dakotas account for 44 percent of all community banks (and just over half the lenders and loans), according to the Independent Community Bankers of America, the trade association. By contrast, the 12 westernmost states are home to about as many people (nearly a quarter of the U.S. population) but to just 10 percent of independent banks. Similarly, the nine Northeastern states, with 18 percent of the population, have just 9 percent of these banks. (One anomaly on the list: Utah is third in the nation for number of loans, with 66. However, most of those loans were made by one institution, Zions Bank of Salt Lake City, an early and enthusiastic participant in the program.) More specifically, Mr. Folsom is describing rural community banks. SBA district directors in both Iowa and Minnesota said that few loans had been made in urban areas — as of last week, none had as yet been made in Des Moines, Iowa’s largest city, according to Mr. Folsom. All community banks like to say they know their customers, but said Paul Merski, the I.C.B.A.’s chief economist, "it’s just a closer relationship in the smaller towns and cities." And yet even that cannot fully explain the disparity. Minnesota is actually not the leader in community banking; Illinois, with 653 institutions, and Texas, with 645, each have nearly 50 percent more banks. But 16 Texas banks have produced just 24 loans — not quite one-sixth Minnesota’s total — even though more people live in rural Texas than in rural Minnesota and rural Wisconsin combined. "My guess is what’s really driving that is the herd mentality," said Bob Seiwert, senior vice president at the American Bankers Association’s Center for Commercial Lending and Business Banking. "If you get a number of lenders in any concentrated area all of the sudden saying I’m going to offer this program, other lenders will jump on board, just so they’re not odd man out." By August 17, 2009 http://boss.blogs.nytimes.com/2009/08/12/want-an-arc-loan-head-to-the-heartland/ Opening a Small BusinessAspiring entrepreneurs are fairly excited when they make the decision to open a small business. Sharing this news with friends and family usually generates a response referring to...Starting a Small Business IdeaYou have thought out an angle for starting a small business idea that is going to revolutionize the industry. Are you willing...Good Small Business PracticesGood small business practices require good business etiquette. To succeed in starting a small business, it's not enough to be the first, the best, or the most competitive...Ergonomics and Modern Workspace DesignToday, few small businesses need concern themselves with a lot of hard labor, but workers are breaking their backs at a whole new kind of grind, spending up to fourteen hours...Small Business LoansSooner or later most small businesses need to get a small business loan, whether to get the operating capital for business startup or to finance an expansion. But whether...American Small BusinessesEven today, the American economy is by no means dominated by giant corporations. Fully 99 percent of all independent small businesses in the country employ...Other Related Articles: Getting Small Business Loans in a Recession with no Collateral Sep 2, 2010Th? global financial crisis h?? m?d? ?t difficult f?r all types of business including small businesses t? g?t business loans. But there a couple of things you cn try to get the much needed loan....Obama's proposed SBA loan changes will help few small businesses Feb 26, 2010The Obama Administration recently proposed changes to the Small Business Administration's ( SBA ) loan guarantee programs to help small business owners whose access to credit has been reduced as a by-product of the financial crisis...SBA loan breaks waiting list has started Feb 22, 2010The Small Business Administration ( SBA ) has run out of money for incentives that made its loans less risky for lenders and cheaper for borrowers. The SBA will set up a waiting list...Credit Unions offer small business loans and possibly lower rates Feb 19, 2010Small businesses are asking for loans for a variety of growth options and some small business owners are looking at credit unions since larger institutions...Last bank left standing for small business loans Dec 3, 2009The choice of lenders willing to work with small business owners has changed dramatically in the last year with the exception of one bank...Michelin will provide small loans to start-up businesses Sept 3, 2009Greenville-based Michelin North America launched a new program Tuesday to provide small business loans to disadvantaged companies across the Upstate and named its banking partner that will administer the loans....Want an A.R.C. Loan? Head to the Heartland August 17, 2009The Small Business Administration recently began posting a list of banks making America’s Recovery Capital loans. The list, which is supposed...Small Business Loans for Newly Set Up Home-Based Businesses August 4, 2009For those who have saved up enough to be used as capital, setting up a small home-based business would be the best solution. By the time new capital infusion becomes necessary, small business loans ...Small business lending falls sharply July 7, 2009Despite emergency stimulus measures, small business lending continues to fall. In the just-ended quarter, the Small Business Administration's flagship program ...Changes to SBA Loans Provides Help to Small Businesses June 22,2009Many argued that the recently passed economic stimulus bill included very little to help small businesses in the United States. Small businesses ...U.S. allows more firms to seek small business loans May 1, 2009The Obama administration will allow about 70,000 more firms to apply for small business loans guaranteed by the government by temporarily raising size limits for the program, government ...Federal Plan to Aid Small Businesses Flawed April 1, 2009Two weeks after President Obama announced a $15 billion initiative to spark lending for small businesses, every major provider of these kinds of business loans ...How to Get Small Business Loans March 27th 2009Getting a small business loan in this economic climate can be tricky, but it is certainly not impossible. When getting a small business loan, banks will...How to Win Small Business LoansYou've got the ideas, the desire, and the plan. All you need at this point is some more money, right? Working with banks on small business loans ...Small banks offer business capitalThe latest credit crunch will make it even harder for small businesses to secure business capital. But some small banks hope to fill the void ...Most small businesses can get loansWASHINGTON — Despite a global credit crisis that has shaken some of the biggest Wall Street institutions, most small businesses are still able to get bank loans ...Small business marketsBILLINGS - The new regional director of the Small Business Administration says small-business owners report banks are reining in credit ... |
. |
