Which Banks are Making SBA Loans?

The ARC loan is harder to get than it should be and serving a much narrower part of the small business community than intended, but if you can get one, it can be a great help to your business. Don’t take no for an answer – get creative!

What Banks are Making these Loans?

For a PDF list of banks in your state offering the SBA ARC loan go to: sba.gov – scroll half way down this page and click on: “List of lenders who have made ARC loans to date”

What is the ARC Loan?

Best explanation of the ARC loan itself that I’ve found on the internet is here at the Business Borrowers Alliance.

Contact Neal Gordon for more info – Just one page of their info is reproduced here:

From Business Borrowers Alliance Website:

About the ARC Loan Program

ARC loans can be used to make payments of principal and interest, in full or in part, on one or more existing, qualifying small business loans for up to six months. ARC loans provide an immediate infusion of capital to small businesses to assist with making payments of principal and interest on existing debt. These loans allow borrowers to redirect cash flow from making loan payments to investing in their businesses, to help sustain the business and retain jobs. For example, making loan payments on existing loans with proceeds from an ARC loan can allow a business to focus more funds on core operations, such as buying inventory or making payroll.

ARC loans are interest-free to the borrower, carry a 100 percent guaranty from the SBA to the lender, and require no fees paid to SBA. Loan proceeds are provided over a six-month period and repayment of the ARC loan principal is deferred for 12 months after the last disbursement of the proceeds. Repayment can extend up to five years.

ARC Loan Eligibility

ARC loans are available to viable, for-profit small businesses in the U.S. that have qualifying small business loans and are experiencing immediate financial hardship.

Your small business must be an established business, have financial statements demonstrating it was profitable in one of the past three years, and be able to project sufficient cash flow to meet current and future loan payments over a two-year period from loan approval. If your business does not meet these criteria, you can discuss your eligibility with your lender. ARC loans are not designed for start-up businesses.

Examples of qualifying loans may include credit card obligations for your business, capital leases, notes payable to vendors/suppliers, Development Company Loan Program (504) first lien loans, other loans to small businesses made without an SBA guaranty, and loans made by or with an SBA guaranty on or after Feb. 17, 2009.

ARC loans are designed to help businesses experiencing immediate financial hardship for reasons such as

  • Loss/reduction of customer base
  • Increase in cost of doing business
  • Loss/reduction of working capital and/or loss/reduction of short term credit facilities
  • Inability to restructure existing debts due to credit restrictions
  • Loss/reduction of employees (intellectual capital)
  • Loss/reduction of major suppliers (major suppliers out of business)

Where do I get the forms?

URL to download the SBA forms if you think you might want to do this you can visit Business.gov and download the forms at:

http://www.business.gov/finance/financing/loans/sba-loans/sba-loan-application.html

or best, bet, contact your bank and ask for the SBA ARC Loan officer. Many banks have customized these forms from the generic ones here, so you’ll end up filling out twice.

The SBA and Politicians Get Another Empty Photo Op With Small Business

What would have happened if we bailed out only the banks and big corporations that didn’t need it? How dumb would that have been? That’s exactly what we’re doing with small businesses.

I’ve been working to get the politicians, the SBA, and the banks to work to support small businesses and live up to the expectations they’ve been putting out there for that support. Media is beginning to take notice. Fox Business Channel may have us on live in the next few weeks, and CNNMoney.com published an article using some of our info today.

The article was too short to say much. Following is more if indeed you even want more.

My position is that I don’t feel the government owes large or small business a handout or even a hand up.

My problem is that once again the politicians and the SBA have made claims about giving a hand up to small business that isn’t living up to any of the hype. Politicians have a bad habit of wanting to get their pictures taken with small business people to pretend that they are providing something commensurate to the help they give large businesses. Again, I don’t care if they help or not, but I do care deeply when they claim something that is not true and further their political careers with empty photo ops at the expense of small businesses. They are clearly not looking out for small businesses on either side of the aisle.

In February, Congress approved a new type of loan for small business called the ARC Loan, which, from outward appearances, appeared to actually be the first loan the SBA and the politicians have ever put out that was focused solely on true small businesses (under 20 employees, which is still 80% of all businesses in America.)

The director of the SBA, Karen Mills, was quoted as saying the ARC loan is for “immediate relief” for small businesses who could pay off “home equity loans and credit cards” used for business purposes. At no other time has the SBA recognized that, good or bad, this is the primary way most true small businesses fund at least part of their startup.

But banks are simply not allowing this loan to be used for this very purpose for which it was designed. And the banks have put so many further restrictions on getting this loan that it is actually easier to get a conventional loan than it is to get this ARC loan.

The restrictions have kept the applications so low that nine months after this loan program was conceived, only 20% of it has been distributed while hundreds of billions were distributed to high risk banks in a few days with no paperwork! But the real travesty is this:

Distressed small businesses can forget it – As a result of the changes the banks have made to the ARC loan requirements, almost no distressed small business can qualify. Most of these loans are going to very healthy businesses who would make it through the recession just fine without the ARC loan. This program, which was designed for “immediate relief” is being issued to healthy companies who don’t need it, and the SBA and the politicians are saying they’re helping distressed small businesses.

If you are lucky enough to have a conventional business loan with your own bank (most true small businesses don’t have these), they will allow you to apply. And if you get accepted, they will take $35,000 from their left pocket (the ARC loan) and put it in their own right pocket (applying it against your other loan with them). This simply reduces their at-risk loans. Paying off home equity loans and credit cards, the principle purpose of this loan program is simply out of the question.

I’m one of those businesses that don’t need the loan. I applied for one of these just to see what the experience is like since I recommended to so many others that they should do it before it was obvious it was so flawed. We don’t owe any money to our bank, Wells Fargo, so we will likely get rejected, but I needed to see if all the objections were real. They are- our initial submission was 301 pages. I’m sure they’ll want much more before we’re told we don’t qualify. Oh, by the way, the bank has already told us that with our good credit and low debt, we already qualify for their conventional business loans, which are much higher risk for them and should have a much higher qualification threshold. Hmm… seems upside down, doesn’t it?

The stimulus was $787 billion dollars. This ARC program is $255 million, or three-tenths of one percent of the entire bailout. Small business is 50% of the gross domestic product but get’s three-tenths of the bailout? The big businesses were given hundreds of billions of dollars in just a few weeks when not a single one of them would have been able to qualify for the $35,000 ARC loan. But nine months later, only 20% of the meager $255 million has been distributed, and that only for the purpose of banks taking money from their left pocket and putting it back in their right pocket.

Meanwhile the SBA and the politicians on both sides of the aisle continue to pat themselves on the back for another empty photo op with small businesses. Again, I don’t care if they help small biz or not – I’m not a victim in need of handouts. But don’t pretend to be helping when you’re actually just using the small business owner to promote your own careers with empty promises.

Continuing (almost daily) attempts to reach politicians and the SBA to get them to either fix this or stop pretending they are helping fall on deaf ears. They’re all too busy patting themselves on the back for once again giving the appearance they’ve been helpful to small business.

What would have happened if we had only given support to the banks and big corporations who didn’t need it? Sounds irrational, but that’s exactly what’s going on with “assistance” to small businesses.

When we use the phrase Social Networking, do we really get it?

I’m not at all opposed to online networking – I use it all the time to build relationships, but no matter what medium you use to connect with people, it’s not about CONTACTS, but meaningful and lasting CONNECTIONS. It’s ALWAYS about being social. So maybe I don’t get it.

“Social networking” is the apparent standard description of online networking. But how is it that “social networking” is somehow just an online thing? I get business from my neighbors, my family, my bicyling friends, my golf friends, my business friends, my clients, and from people I meet in a restaurant, as well as from people on Twitter and Facebook.

“SOCIAL” networking is a great idea, in fact it’s the only way to network, by being social, not salesy – making friends and meeting needs. But most people who do offline or online networking aren’t social about it at all. Most networking opportunities are simply a place to collect business cards and try to sell things to people, which is why most serious business people with a true network and lasting connections don’t show up at networking events.

They’re too business doing real social networking – playing golf with a friend, hosting a small and intimate wine tasting at their house, having a cup of coffee with a few business associates, riding a bike with a half dozen others, or meeting with their very committed referral network. And in all this, their objective is to serve people and meet THEIR needs, which is the opposite of most classic networking strategies.

When truly social business people move online, they have no interest in networking, but in building a network, and they don’t focus on contacts, but on lasting connections. Twitter and Facebook look the same to them as a cup of coffee with a few friends – they’re focused on trying to serve others and see how they can push them forward, not on selling things to everyone that says hello.

So I’m confused. If “social networking” is something you do online, then what is connecting a friend with a potential employee for her, or meeting someone over a cup of coffee – is that “unsocial networking”?

The communications medium is not the magic. The willingness to serve other people where they are at, not where I want them to be, and to get them to their goals are the keys to the business kingdom. No matter what the medium, I will get farther by serving people than selling to them.

I can’t bring myself to call either online or offline networking “social networking” because it implies there are types of good networking that aren’t social. If people don’t like me, they won’t buy from me. What part of building a network SHOULDN’T be social? Maybe I just don’t get it.

The Four Cornerstones of Business Success & Significance

The Four Cornerstones of Success and Significance are A Big Motivator and Three Bosses.

  1. The Big Motivator – or The Big Why – Lifetime Goals

  2. Boss #1 – A simple Strategic Plan that runs my daily business

  3. Boss #2 – Process Maps and Process Descriptions to create freedom and a reproduceable business (and make it worth a lot more money)

  4. Boss #3 – Outside Eyes on my Business to catch the blindspots and bring balance and completeness to my leadership.

1) The Big Motivator

Why? Why is the least asked question in business and is the most important at every level, from buying a shiny object (Why?) to the reason you do what you do (Why are you in business – what’s the end game?)

Businesses that create success and significance for the owners and in the world around them have all answered why and are driven forward by that Big Motivator. What are your Lifetime Goals, and how are you building your business to get you there? Business should have a purpose – what’s yours?

2) Boss #1

Where and When? – I use a Two-Page Strategic Plan to run every aspect of my business. I know exactly WHERE I want to go and WHEN I want to be there. The second least asked question in business is “When?”

I know exactly what my business looks like at maturity and I have a Business Maturity Date – Feb. 18, 2001, 10am. We all know exactly where we are going on vacation and when we want to be there, and that informs us what we need to do before hand, and how and what to pack. We go blissfully through 30 years of business ownership blindly packing the car of our business day after day with no idea where we are going or when we want to be there. How in the world can we make a decision about today if that decision lives in a vacuum? Is it any wonder most businesses never grow up? Do you have a simple Strategic Plan and a Business Maturity Date?

3) Boss # 2 How?

Process Mapping is that route to freedom for the small business owner. It gets all the processes out of their head on to paper so they can create quality clones of themselves who will produce as well as they do, so they can stop being control freaks and get a life.

A business owner who wants to create success for themselves and significance in the world around them with their business has others doing the production so they can focus on the Important things while others take care of the Urgent things. Do you have your processes mapped on a simple graph with some descriptions of each step? Business freedom is not within your grasp if it’s all in your head.

4) Boss #3

Outside Eyes on your business. None of us can figure it all out, and we’re too subjective about and too close to our own businesses to see the potholes.

The business owners who are intent on using their businesses to create success and significance all have peer advisors, mentors, advisory groups, or others who can speak to their business. Who are you allowing to see behind the curtain who can help you build success and significance?

Summary

Do you have your Big Motivator and your Three Bosses? I know, you don’t have time to do this, which is why you’re still on the treadmill. There is no such thing as lack of time, there are only priorities. If getting off the treadmill is a priority, you’ll find the time to not just make money, but build a business that makes money for you, so you can turn your attention to creating success and significance, not just revenue.

Make More Money – Stop reacting to shiny objects and winds of change.

Small businesses with the fastest growing revenue know exactly where they are going. According to Inc Magazines 28th 500 fastest growing small businesses list, approximately 88% of them have a statement outlining where they are going. The other 12% are living dangerously.

That’s no surprise. As simplistic as this next statement sounds, it’s incredibly profound – People moving in a clear direction tend to get somewhere. The rest simply react and respond to the world around them by changing direction every time an outside influence creates adversity or opportunity, wandering and wondering their way through years of aimless business stagnation.

The smaller your company is, the more you need a vision statement, because you are more affected by every wind of change that comes along. A small boat is much more affected by small changes in the weather than a big ship.

Small business owners are so buried in the day to day Tyranny of the Urgent that coming up for air to see where the boat is going is never a high enough priority. Not knowing where the boat should go makes this the biggest issue a small business owner has. He who aims at nothing hits it every time.

Ever wonder why you’re on the treadmill? It’s because you don’t know where you’re business is supposed to take you. What is the end game? As my Irish friend John Heenan says, “If you don’t have a vision for your own life, you become part of someone else’s vision for theirs.”

Start with a vision statement for your business that has the following attributes:

  1. Simple, short and devoid of business-bingo words like “growth”, “success”, “best practices”, and other such fluffy and meaningless business-speak.
  2. Expressing your personal values into your business. Use your business to get you somewhere. The vision statement for my business is “Live well by doing good.” We have a number of very specific, measurable ways we can unpack this in our business, and we know exactly where it is leading us to the date and time (we intend to arrive at Business Maturity on Friday, February 18, 2011 at 10am) It drives everything we do.

Find out why you’re doing what you’re doing and where your business is supposed to take you. Then go that direction – relentlessly, tirelessly, with the will to succeed and in single-minded pursuit of that objective.

Stop reacting to shiny objects and winds of change. Take control of your business direction and you will make more money in less time.

The Virtual Small Business Growth Conference

So many new businesses fail, and worse yet, almost all of them stagnate and struggle along for years – don’t be “that guy”… Don’t become a statistic!

I’m supporting the mission of the Rockies Venture Club / Angel Capital Summit to help your new business survive and thrive. I’m very involved with helping put on the Angel Capital Summit on November 17th at the Colorado Convention Center, which was the largest event of its kind in the nation last year, and we expect it to double to 1,000 people this year.

But it’s not about just that one day conference. We will be providing guidance to small businesses long before and throughout the year after the Angel Capital Summit. To that end Rockies Venture Club and the Angel Capital Summit is starting our weekly series of free Business Clinics, bringing the best and brightest business experts directly to you and your key partners.

This is the ‘virtual ACS’, which is a rolling series of online seminars presented by and for entrepreneurs, advisors and investors. You can’t afford to miss this opportunity to solve problems, educate and guide your staff through today’s unique business challenges.

  • September 16, 2009 – Dave O’Brien, “Your ACS application: Learning to think like an Investor.” REGISTER
  • September 23, 2009 – Chuck Blakeman, “Get a Strategic Plan, not a Business Plan” REGISTER
  • September 30, 2009 – Kevin Houchin, “The Other Side of IP: Trademark and Copyright for Entrepreneurs” REGISTER
  • October 7, 2009 – TBA
  • October 14, 2009 – Brian Tsuchiya, “ABC’s of Angel and Venture Capital Funding” REGISTER
  • October 21, 2009 – Steve Kregstein, “Getting it right – avoiding legal and other pitfalls in starting and growing your business”
  • October 28, 2009 – TBA
  • November 4, 2009 – Steve Parry, “How to Build Your Sales Engine?”
  • November 11, 2009 – Chris Roberts, TBA

To Register click on the links embedded above or start here. Not all registration pages are up yet so check back often for the programs you wish to attend.

Get plugged in and keep growing!

Act your way to a new way of thinking – get disoriented.

Bob Parsons of GoDaddy says simply “get and stay out of your comfort zone”. I agree and would add that adults don’t learn unless we are disoriented.

When we believe we ”know”, that is when we stop learning. We must be disoriented from the comfortable zone we live in.

Learning is helpful, but teaching is usually a waste of time. Teaching is someone filling my head with information when I’m not disoriented enough to learn. Learning is me filling my life with a new way of living.

We do not think our way to a new way of acting.
We act our way to a new way of thinking.

Our education system has it backwards. Therefore, give people new ideas when they are in a place that they want to learn them and they will stick. ”Teach” them the same ideas when they are not disoriented from what they already know in their heads about the subject, and you’ve both wasted your time. The old adage “more is caught than taught”.

Business owners best learn and adapt when they are disoriented enough to gain new Clarity (vision for the future – they see it), that brings Hope (they believe they can do it), that allows them to take measured Risk (they will take action). If they have Clarity about where they are going, they will have Hope, and will take the Risk to learn and adapt. Clarity, Hope and Risk.

Healthy disorientation happens best in community. Business owners rarely live in community, but are taught to go it alone, which gives them even less feedback to disorient them, making them all the more sure that there myopic view of the world is just fine.

John Wayne is dead and we should have buried the rugged individualist with him. Get into community, get disoriented from your reality, and keep learning. The more I learn the less I know.

Clarity, Hope and Risk – growing a successful business.

In the big picture there are really only three things we need to grow a Mature Business.

Clarity

Successful business owners know where they are going and when they intend to be there. They have a vision for the future that drives everything they do. Do you know where you’re going? What does your business look like at Maturity? Get clarity on where you’re going – it’s the first step in growing a Mature Business.

Hope

When we get Clarity on where we’re going, that creates Hope. We know where we’re going and we have something to begin to invest in mentally and emotionally that gets us excited about the future. He who aims at nothing hits it every time, but those who have a clear direction are busy getting after it. Do you have Hope for your business? If not, you need more Clarity on where you’re going and when you expect to be there.

Risk

Clarity brings Hope, and Hope allows us to take measured Risks to get there. Bob Parsons says “Get and stay out of your comfort zone.” It’s the only way to grow a business. Ray Krock was a little more blunt – “If you don’t want to take risks, get the hell out of business.” If you aren’t taking Risks, you don’t have Hope, probably because you don’t have Clarity on where you’re going.

Clarity creates Hope, and Hope allows us to take Risks. Successful business owners have all three.

Wandering and Wondering In Business

Are you wandering through your business wondering what it could be like when/if…?

We almost always get something close to what we intend. Most people never think about what they want out of life, so they never figure out what their business should look like to support a life of significance. As a result, most people never accomplish the things that would have made their lives count for so much more. We wander through life wondering how it could be different.

I talk to people all the time who can give me some picture of an idyllic life they find attractive, but being able to verbalize what something might look like some time in the undefined future is much different than intending to achieve it.

Let’s not wander through life wondering what we could have done if….

Bad plans carried out violently many times yield good results. It’s not how good your plan is, but how commited you are to the bad plan you’ve got. What does your ideal lifestyle look like? What impact are you making. WHEN do you want to be there?

What does your business need to look like to support your ideal lifestyle. WHEN will it get there (maturity)?

Clarity brings Hope, and Hope allows us to take measured Risks. Wandering through our business only makes us wonder what it could have been like if…

The Law of Intentionality – it’s no secret.

More often than not, we catch what we pursue, not what we envision. Contrary to a commonly held popular narrative, we aren’t successful by just envisioning what we want. There are three legs to the Success Stool, not just one:

1) Vision

Know where you’re going and when you want to be there. Don’t know that? Don’t bother with anything else. If you didn’t know where you were going on vacation and when you wanted to be there, how would you know when to start packing your car and what to put in it? It’s a big duh, I know. Yet we never think to apply the same duh to our business.

Do you know where you’re going in your business (what does it look like at Maturity), and when you want to be there? Of course not. Yet you’re out there every day packing your business car with no idea where you’re going or when you want to be there. Until you know the outcome you are shooting for a few years from now, can describe it in detail, and know exactly when you intend to be there, you’re not building a business, your just making money.

And making money is killing your business. Stop making money and figure out what your business will look like when it’s making money for you. Put a date on when you intend to be there and watch the fireworks begin. Put a time of day on it, too, that will really get the Business Maturity clock ticking in your head. My Business Maturity Date (BMD) is Friday, February 18, 2011, at 10am. What’s yours?

2) Skill development

There isn’t a golfer on the PGA tour that doesn’t know their statistics, which makes it clear what their strengths and weaknesses are so they can train with a purpose. We call them professionals. We all want to be called business professionals, yet most of us don’t have any numbers we follow religiously, and as a result, have no clue what skills we should be developing. We wing it through every business day, putting band-aids on broken legs and wondering why The Tyranny of the Urgent rules our day. If we were truly professionals we would have a plan for professional development and be committed to it. We all want to be the best in our class, until we actually have to practice to get there. Too many of us are just playing air guitar – we’re faking it.

3) Diligence

Diligence is the mature form of discipline. Discipline is the short-term act of preparing for a marathon by following the training schedule. Diligence is the act of running all your life to stay fit. If you develop the art of diligence and not just discipline, you’ll be much more likely to be successful over the long haul and get to your Business Maturity Date.

Discipline can get us to a short-term objective, but diligence will take us all the way to the end. Diligence breeds quiet resolve toward long-term goals. And it is founded in conation – the will to succeed that manifests itself in single-minded pursuit of a goal (John McClintock’s definition in Self-Made in America).

Vision isn’t enough to get us where we want to go. It’s a map. We still have to get on the trail and walk in the right direction.

Having a plan to develop our skills isn’t of any value if you don’t have a “big why” for doing so, and the diligence to develop them for the long haul.

Discipline and diligence aren’t enough. I know plenty of people who are committed to doing the same things every day who have know idea why, and have never thought about where it’s taking them.

We need Vision, Diligence, and a plan for developing the right Skills. Put all three of these together and that is the Law of Intentionality – I know where I’m going, I know what I need to do to get there, and I’m committed to whatever I have to do to make it happen.

You’re much more likely to get somewhere if you put all three of these legs on your business stool.