Many Central Oregon businesses recently received a ‘Lenders Newsflash’ in their email via the COCC Continuing Education Business Development Center thanks to Beth Wickham.
The U.S. Small Business Administration has a new loan program designed just for businesses in distressed economic areas. There are thousands of local businesses, still operating, quietly taking one day at a time that could use a loan (a bailout of sorts) from the government that could help them through the next few months while the economy recovers.
SBA explains that its America’s Recovery Capital Loan Program (called ARC) can provide up to $35,000 in short-term relief for viable small businesses facing immediate financial hardship to help ride out the current uncertain economic times and return to profitability.
ARC loan funds can be used for payments of principal and interest for up to six months on existing, qualifying small business loans, capital leases and vendor loans.
At the end of six months the loan payments will be deferred for 12 months followed by a five-year period of monthly principal payments. ARC loans are 100 percent guaranteed by the SBA with the interest paid by the government for the life of the loan.
If your small business is stressed meeting expenses during these economic times you probably took note, read the fine print and thought your prayers had been answered. However, getting your bank to help process an application for this loan may be another story (see story page 13).
In a call to Wells Fargo we discovered that, yes, they are processing the loans albeit from a national processing center through an 800 number, which will mean that there is little personal connection for the loan.
We strongly suggest that if you have a loan with any local bank you contact them immediately. It would be in their best interest to help you get some of the money. Your bank will benefit by you having more capital.
Why are some local banks, even preferred SBA lenders like Bank of the Cascades and Columbia River Bank, not helping our local small businesses secure some of this money? It sounds like a great plan, a bailout of sorts for small businesses at last and who needs it more than right here in Central Oregon?
An SBA representative in the Portland office noted that it was likely that local banks don’t see it as a benefit to their bottom line and therefore deemed it too much red tape with little return.
On the other hand one particular bank in Portland, Albina Community Bank, has decided that it was time to step up to the plate and be a part of the solution to its area’s economic woes, rather than horde money and let businesses fail. We love what Albina says on their website: “As a locally-owned and operated neighborhood bank, we’re empowered with the freedom to think outside the box to offer you creative and personalized banking solutions for all your dreams, inspirations and successes.”
Albina has already reaped its own rewards when it made sure some of the businesses within its community received the ARC funding — it’s received good press in Portland newspapers noting that the bank is helping small businesses as well as developing an expanded customer base.
So, why are some of our local banks not willing to help small businesses in our community succeed? Here is money that the government is willing to loan, interest free, to economically stressed companies. What’s not to like?
If any company in Central Oregon has been able to benefit from the American Recovery and Reinvestment Act of 2009 we would like to hear from you. If you have applied for any of these funds and had a bad experience we would also like to hear from you. Email: firstname.lastname@example.org or call us at 541/388-5665.