For all of you entrepreneurs who have been whining “Where’s our bailout?” your time at the public trough has now arrived. It is not the rent seeking entrepreneurial welfare that was the topic of conversation at this blog a few days ago, but it is darn close.
From the Tennessean:
The U.S. Small Business Administration made a new loan program for struggling businesses available Monday. The ARC loans, which were funded by the American Recovery Act, are interest-free loans of up to $35,000 with no SBA fees for existing businesses that were profitable at one point, but need extra help now.
The program is unusual in that most small-business loans are for businesses trying to expand to fund profitable operations.
Thus my label of “bailout.” This are not sound loans — these are handouts.
Thankfully, bankers are hesitant to join in this give-away. From CNN Money:
Before the details were released on Monday, lenders were hesitant to commit, concerned that there wasn’t enough economic incentive
for them. Now, with key details about how the program will work finally
available from the SBA, many haven’t retreated from their initial
wariness.“While we have received a few requests from our customers, we are still leaning against it,” says John Handmaker, president of Quadrant Financial,
a small business lender based in Louisville. “The guidance from the SBA
indicated rates and terms, which have provided some clarity, but we’re
not 100% certain about what we need to be careful of. We don’t feel we
have a solid grasp of the standard operating procedures and rules, and
we’re not going to jump in until we really understand it.”
Well, at least the government is consistent. It is ready to rush to enact another program without worrying about the details. I am sure we will soon hear that bankers are being pressured to get on board with this program.
Please, just say no to this latest bailout. If you believe in free enterprise do not become part of the rush to socialism.
Funny, I thought that this whole Credit Crunch originated from the sub-prime home loans that the Clinton administration forced in during the 90’s. Surely the last thing anyone wants are sub-prime loans to businesses.
Mind you, if SME’s in the US can get loans at all, they are lucky compared to over here in the UK, where it seems the bailout of the banks by the government hasn’t left them any more inclined to lend to even profitable businesses than they were when they were facing extinction.