SBA PROGRAM FAILS
If you're looking for help from Big Brother in Washington, forget it. I checked with the Small Business Administration to see how its widely promoted flooring loan guarantee program announced this spring has been received. It hasn't worked out very well. In July, an SBA official estimated that as many as 4,000 loans would be made under the program. The actual number isn't even close to that. An SBA official told me in September that only nine dealer loans had been completed under the program, and none of them were for motorcycle dealers.
It's not clear whether businesses aren't seeking the money (some say the requirements are poorly designed) or whether banks simply aren't lending the money. But according to the SBA official, "many lenders that have not been involved with this kind of loan and have developed neither expertise nor systems to handle them are leery of participating, and that keeps the numbers down." (Isn't the SBA supposed to be educating these guys?)
Here's the bottom line: Credit is tight and it's getting tighter, especially for consumers and small businesses. One industry observer expects $1.5 trillion of credit card lines to be pulled out of the system by the end of 2010.
So don't look for a boost in the new year. It's simply not going to happen.