Just got off phone with Wells Fargo, looks like the program has arrived....with qualifications..I am focusing on this helping and working...

This program is picking up - it is just not running out the door. Also, many past SBA loan underwriters are not renewing their programs but other banks that have not done these in the past are starting new programs.

Deb,   Would you be willing to share who those banks are that turned you down?   Thanks   Neal Gordon Business Borrowers Alliance

SignGuy, If you were truly told by Wells Fargo that you are ideal for the ARC program but it's not worth it to them, I'm quite certain they would not want that to become public - there's a lot of problems politically and perhaps even legally for them in a statement like that. You should not re-apply, but simply challenge the ruling and ask them to give you IN WRITING exactly why you don't qualify. If you qualify (as the aboe suggests) and they can't find any legitimate reason not to give you this loan, then they MUST do it. So go back and ask them for a specific written reason and do not accept the generic one the WF has been sending out 'this decision was based in part or in whole on your credit rating.' I have it from the highest authorities at WF that is a legally approved 'non-answer' to discourage you from getting the real answer. If you get stonewalled in any way, please email me at cfblakeman AT gmail DOT com (obviously changing my email here so BOTs don't pick it up). I will give you contact info for the person at WF who is in charge of all SBA lending - he was one of 70 people at Obama's small business summit last month and I'm certain he does not want this kind of publicity. You will get your loan very quickly if we have to escalate to this level. Keep me posted.

Elease, You are correct in saying the ARC loan is not non-existent. However, for the purpose it was created, it is indeed non-existent. In February Karen Mills stated the ARC loan was created for 'immediate relief' of 'distressed but viable' small businesses. 10 months later, of the $255 million approved, only $130million of it has been committed. The bigger tragedy is that almost none of the monies committed to small businesses is going to businesses that are 'distressed but viable.' Only healthy businesses are getting the ARC loan and they are laughing all the way from the bank - it's found money for companies that don't need it, but love having it. So the statement is true - the ARC loan (as it was designed) is non-existent.

I too have 800 credit, profitable but leveraged and stretched. I applied for ARC thru Wells Fargo, turned down and wonder if I could re-apply. Six months have gone by, we survived and actually in better shape. WF said 'I was ideal for the ARC loan' but was not worth it for them. Can I re-apply?? Thanks! SignGuy

Elease, I'm certain as well that anecdotally we can find a very few businesses who are distressed but viable who got this loan. But the facts are simply not on your side. You say you are 'absolutely certain no one is laughing all the way from the bank.' Give me your evidence for this certainty. Here's mine. I know three businesses personally who received the ARC loan. 1) All three of them were 'distressed' ONLY in that there revenues were down from the year before and one of them had even laid off a couple people, but that is not true distress - that's just tough times. No business needs a special 100% backed, zero cost, 0% interest deferred payment loan to get through that, and all three of them would admit it. They would have come through the recession intact and rehired the few employees without the ARC loan. 2) All three of them qualified for and were offered commercial loans (and in two cases steered heavily in that direction because banks don't make money on the ARC loans) before reluctantly being given an ARC loan. None of them saw any reason at all to get a commercial loan when they could get a freebie. The ARC loan was specifically created to help 'distressed but viable' small businesses who could not qualify for a commercial loan but clearly would see a path to profitability if they had $35k at their disposal. Any business that could qualify for a commercial loan does not need and should not have gotten free government money. Imagine if we had given TARP money only to the healthy banks that could already qualify for commercial loans - that's exactly what the ARC program has turned out to be - a free money source for the healthiest of small businesses who could get money via traditional sources but are indeed laughing all the way from the bank. 3) The rejection rate on these loans is higher than any other SBA loan in history by an incomparable rate, and probably higher than any business loan program in history. The highest officials at Wells Fargo in Colorado tell me they have processed thousands of applications but given only 15 ARC loans to date. Don't tell me 99.5% of all the businesses who applied are not 'distressed but viable' - it's not statically possible. 4) The application and the requirements are identical as for a $2 million 7(a) loan with the exception that there are extra requirements laid in on top. The 7(s) loan is not designed to relieve any kind of distress at all, but it has fewer requirements and less paperwork than the ARC loan. The ARC was NOT designed to be harder to get than a 7(a) or a commercial loan, but the fact is that is is indeed harder to get. 5) Ten months after inception and seven months after it started, still only 55% of the $255 million has been loaned to the possible 28 million businesses that could apply, not because owners aren't applying successfully and fully meeting the requirements of that application, but because banks don't want anything to do with this loan (7 of the top 10 don't even offer it). They (and the SBA) were not consulted when it was designed by Olympia Snowe - it was just dumped in their laps and they are doing everything they can to run from it. 6) Karen Mills say it was designed for 'immediate relief'. We gave $800 billion to big banks and another $787 billion to big government and big businesses, all in a matter of days, and to entities that could not in any way qualify for an ARC loan. Yet ten months later the paltry $255 million is still only 55% committed. That kind of long delay was not the intent of this program. 7) After getting significant negative feedback from many businesses, I applied myself to see what all the fuss was about. My initial submission was 301 pages and I was rejected specifically (and in writing) for my credit rating, which is two points from perfect. Along the way I was offered two 7(a) loans and five commercial loans - banks were almost begging me to take out these loans which were supposed to be harder to get than an ARC loan. (I did receive approval after publishing articles in CNNMoney.com and other national media exposing the banks on this. I have not funded the loan.) Again, this loan was not intended to be harder to get than a 7(a) or a commercial, but all the facts are there. So I'll ask you? Are you one of the very few who received this loan who wouldn't qualify for a commercial or 7(a) loan, or are you one of the majority of very healthy ones whose business happens to be down who recognized free money when they saw it and is laughing all the way from the bank? I'll frankly be surprised if you couldn't qualify for a commercial loan because I know a dozen busines owners who got rejected for the ARC loan who were all offered commercial loans along the way to that rejection. This is not a legitimate program and Olympia Snowe, one of its authors knows it, which is why she quietly sneaked legislation in three weeks ago to kill it immediately and pull the uncommitted funds back into the Treasury asap. Even the programs sponsors know it is illegimate and completely broken. You can anecdotally 'believe' what you want because you got one, but give the rest of us facts so we can believe with you. Otherwise the above facts will have to stand.

Lenders are typically very risk averse in the current climate and finding one to work with can be a real issue, particulalrly for the self employed as it is seen as an unstable income.   Add to the pot that these loans are designed for businesses which are 'distressed' already and it doesn't make a great lending proposition.  For a lender to get on board they need a reasonabvle amount of certainty the loans will be repaid.  Perhaps if there was some inherent guarantee of repayment via SBA or some other authourity the responses would be more possitive? Message Edited by mrhelpful on 12-16-2009 01:56 PM

MrHelpful, You wrote 'For a lender to get on board they need a reasonabvle amount of certainty the loans will be repaid. Perhaps if there was some inherent guarantee of repayment via SBA or some other authourity the responses would be more possitive?' The SBA told the banks up front that they expected a 56% default on these loans and provided a 100% guarantee of repayment if the borrower did default. The SBA has never given a 100% guarantee - best they've ever done in the past is 90%. So banks were given a pass up front and told they didn't have to do any better than 4 out of 10 good loans, an unheard of default rate. The fact is that because the banks and the SBA have made it so difficult for truly distressed but viable businesses to get this loan, that the default rate on these loans will probably be lower than any SBA loan in history, certainly not above the normal 5%. But the bottom line is that the banks have a bigger safety net for these loans than any in history, yet they are harder to get than any in history. True small businesses that are distressed and viable are not getting these loans. That's why the person who started this thread said they are non-existent.

Chuck, again, I have to say that I disagree with you.  Our company is both viable and yes, distressed (had to reduce our workforce by 50% along with other drastic measures to remain solvent) and that ARC money will help us in exactly the way that it was intended.  The criteria for this particular program are so precise that I'm certain that no 'healthy' company has been approved over one that is genuinely in need and I'm absolutely certain that no one is 'laughing all the way to the bank'.   I honestly believe that the reason so few folks are telling positive stories about their ARC experience is that the application process is so in-depth and the documentation required so thorough and intricate that many companies just do not have the desire to wade through the red-tape and wait out the decision-making process. I'm afraid that it's the nature of the beast-- dealing with the federal government is a time-consuming and labor intensive  process and definitely NOT for the faint of heart. BUT the program is legitimate and IS helping people like me, make it through this recession with a 'viable' business in tact.