SBA on Continuing ARRA Programs SBA issued the following statement today from Administrator Karen Mills regarding efforts to ensure continued funding for two key provisions in the American Reinvestment and Recovery Act (ARRA) of 2009: “Over the course of the last few months, the Obama Administration has announced several steps to ensure the continued recovery of small businesses, including our commitment to working with Congress to increase maximum loan sizes for the 7(a), 504 and microloan programs and plans to make access to capital from government lending programs easier for small banks in communities across the country. Making or Breaking U.S. Small Businesses - The Epoch Times Since the changes to the SBA loan program of the American Recovery and Reinvestment Act enacted on February 17, the federal government has increased support of loans to small businesses by more than 60 percent to a total of $11.3 billion. The average number of weekly loans approved rose by 50 percent, and in September alone, loans amounting to $1.9 billion were approved. The September increase was the highest since August 2007. . . . keep reading FDIC's Bair: Bank Failures Will Peak In 2010 - WSJ.com Federal Deposit Insurance Corp. Chairman Sheila Bair said Tuesday that more banks are set to fail. "We do obviously have a lot more banks that will close this year and next," Bair said, adding the failures ???will peak next year and then subside." . . . keep reading Bank Regulators and Politicians Not on Same Sheet of Music by Geof Longstaff, Chairman of Mercantile Capital Corp. "America's banking industry crisis is more serious than we care to admit. Banks are failing weekly and most industry insiders project more failures over the next year, jeopardizing the nation's critical FDIC insurance fund. Coupled with record high loan losses, inadequate capital and the inability to raise more capital, banks face a major industry challenge and the nation faces a potential disaster. Geof Longstaff teaches at the Graduate School of Banking at Louisiana State University in Baton Rouge . . . keep reading Advanta Files Chapter 11 One of the largest issuers of small business credit cards in the U.S., Advanta Corp. on Sunday filed for Chapter 11 bankruptcy protection. The filing comes only five months after the company froze all further lending on its more than 1 million customer accounts. The bankruptcy filing comes on the heels of a bankruptcy petition filed by CIT Group, another leading small business lender, only seven days earlier. In the case of Advanta, a deepening recession, astronomical loan defaults, and numerous lawsuits appear to have contributed to the company's troubles. . . . keep reading Chase Plans to Increase Small Business Lending in 2010 to $4 Billion Chase is adding the bankers in 23 states, including at least 125 bankers in markets formerly served by Washington Mutual, the company whose banking operations Chase acquired last year. Many of the newly added bankers will be in Florida, said Nancy Norris, a spokeswoman for Chase. . . . keep reading Obama Plans Small Business Forum November 18 - Treasury Secretary Geithner and SBA Administrator Mills To Attend The forum will gather business owners, lenders, lawmakers and regulators in a bid to make more credit available to small firms so they can expand again after the recession and curb U.S. unemployment that has swelled above the 10 percent rate. U.S. Treasury Secretary Timothy Geithner and Small Business Administrator Karen Mills will host the meeting to discuss "new ideas and strategies for expanding access to financing for small businesses," the official said. . . . keep reading CPR Report After an extremely low reading last month, the October prepayment speed rose 45%, hitting CPR 9.52% from a decade- low of 6.55% recorded in September. To date, the 2009 overall prepayment speed is exactly CPR 9%, having risen from a YTD in September of 8.94%. "With the Default CPR returning to the 5% to 7% range we have seen most of this year, hopes for a fundamental shift to levels last seen in early 2008 have begun to fade." . . . keep reading ARC Loan Program Is Expected to See 60% Default Rate - Washington Post Just how $255 million in federal funds was set aside for the program -- called American Recovery Capital -- is a classic Washington story. When Congress negotiated the final details of the American Recovery and Reinvestment Act, Democrats needed to secure a few key votes from Republican colleagues for the stimulus bill to pass. This allowed Sen. Olympia J. Snowe (R-Maine) to ask for a few concessions -- including a loan program aimed at helping her home state's ailing lobster industry. . . . keep reading Bottlenecks, Red Tape, High Costs Hinder SBA Loan Programs President Obama's plans to aid small businesses by providing banks with low-cost capital to make more loans has been criticized for its trickle-down approach to putting capital into the pockets of entrepreneurs. The president's program has also put a greater emphasis on leveraging the Small Business Administration's loan programs to help boost lending. But many of those programs are hampered by bottlenecks, red tape, and high costs, which are compounding the problems caused by stingy banks. . . . keep reading Partner Engineering Adds 8 To Staff Partner Engineering, a full service environmental consulting firm servicing SBA loans nationwide, continues to expand their professional staff due to the high demand for their services. With staffed offices throughout the nation Partner continues to be the leader in performing RSRA's, TSA's, Phase I's and all other environmental services to SBA lenders. According to Gary Reynolds, a Principal with Partner and SBA Specialist, "lenders are turning to Partner because they realize that we fully understand the requirements set forth in SOP 5010 5 (B), and continually strive to provide exceptional service on every job. We hire the cream of the crop of professionals so that we are able to continue to deliver high quality on-time reports that pass the scrutiny of the SBA". . . . keep reading Federal Register: Secondary Market First Lien Position 504 Loan Pool Guarantee The Recovery Act authorizes SBA to establish a program to provide a guarantee for pools comprised of portions of these first mortgage loans that will back certificates to be sold to investors. Effective Date: Due to the disruption in the credit markets, there has been a significant decline in secondary market activity relating to First Lien Position 504 Loans. . . . keep reading The New 7(a) Lender Matrix -- When Must Lenders Contact The SBA? On October 20, 2009 the SBA published its most recent Servicing and Liquidation Actions 7(a) Lender Matrix (version 3), which provides guidelines for all lenders to determine whether they can take unilateral action with or without notice or pre-approval by the SBA pursuant to SBA Regulation 13 CFR Part 120.536 effective April 12, 2007. . . . keep reading Community South Bank Loan Officer Completes Loan for Construction of Famous Tea Room For Immediate Release November 4, 2009 Community South Bank Loan Officer Completes Loan for Construction of Famous Tea Room MEMPHIS, TN (November 4, 2009) -- Community South Bank, voted Preferred Program Community Bank of the year in Tennessee, announced that Jana Rouble, Community South loan officer, assisted in closing a loan for St. James Tea Room in Albuquerque, New Mexico. Rouble worked with BMC Capital to provide the loan to the owners of the tea room. The loan was closed including construction within 45 days. . . . keep reading Historical SBA 7(a) and 504 Charge-Off Data 1989-2009 Report: Lenders With 1,000 or More Charged-Off Loans in Last 20 Years. Bank of America approved 88,782 SBA 7(a) and 504 loans between January 1, 1989 - April 30, 2009, charging-off 12,730 loans (14%). This graph shows the charge-off numbers for 9 SBA lenders with over 1,000 charged-off loans. . . . keep reading Number Of SBA Loans In Default Increases - Examiner.com Last year's failure rate is a sharp increase over past years. In 2004, the SBA loan failure rate was 2.4%, but it has increased each year since, rising to 8.4% in 2007. The 2008 failure rate of nearly 12% covers the fiscal year that ended on Sept. 30. In that year, the SBA's 7(a) and 504 programs approved 78,324 loans, totaling $18.2 billion. . . . keep reading CIT's Long Goodbye - CNN Money But others who track small business loans see ripple effects. Lending to small businesses has been cut in half this year, according to Bob Coleman, editor of the Coleman Report, a trade publication that monitors small business lending trends. Outgoing CIT CEO Jeffrey Peek likes to call his company "the bridge between Wall Street and Main Street." Since last year, that bridge has been collapsing. . . . keep reading First South Bank Awarded Certified and Preferred Lender Status by Small Business Administration Nick Nicholson, Executive Vice President - Chief Credit Officer for First South Bank, stated, "We are pleased that First South Bank has been awarded both Certified and Preferred Lender status by the SBA. This will allow us to generate and process SBA loans directly, resulting in faster turnaround time and provide us additional opportunities to grow and diversify our loan portfolio. First South Bank will be among select lenders in North Carolina approved by the SBA as both Certified and Preferred SBA Lenders." . . . keep reading CIT Bankruptcy is "Huge Blow" to Main Street - Fox business News Interview CIT is down over 80 percent in 2009 versus 2008 and that translates all across the tens of thousands of small businesses that they service according to Bob Coleman. CIT going bankrupt is a "huge blow" to Main Street. Bob Coleman was interviewed on Fox Business News' "Happy Hour" on November 2, 2009 . . . keep reading SBA Program Enhancement Recommendations Proposed by Top 100 SBA 7(a) Lender Top areas of critical concern to small businesses and community banks relative to SBA's 7(a) and 504 loan programs: . . . keep reading CIT = More Bad News for Small Business - Reuters "It's great that the stock market is coming back, but if you're unemployed or you're running a small business, the turnaround has not happened," said Drew White, CFO for Sageworks Inc., which monitors the financial data of privately-held companies across 1,600 industries. Sageworks's latest study found that since 2003 the debt-to-equity ratio decreased in the private sector, which might normally be a good thing, . . . keep reading CIT to file bankruptcy November 2, 2009 -- WSJ The company plans to file for bankruptcy in New York as soon as Sunday night or early Monday, said people familiar with the matter. CIT is poised to enter bankruptcy with enough creditor support to approve its reorganization plan and shorten its stay in Chapter 11, these people said. CIT and Mr. Icahn declined to comment. . . . keep reading IFA Supports Bill to Improve Small-business Lending Programs The IFA strongly urges Congress to consider further increasing the loan limit in this legislation from $3 million to $5 million. Recently, President Obama and SBA Administrator Karen Mills have also indicated support for Congress increasing the loan limit to $5 million. The IFA is also concerned that while H.R. 3854 increases the maximum loan amount, it does not increase the amount of the guarantee. The American Recovery and Reinvestment Act temporarily increased the loan guarantee rate to 90 percent. The IFA recommends that until the economy recovers, . . . keep reading Small Businesses Could Face New Credit Squeeze - WSJ "We're entering into an era of uncertainty," says Bob Coleman, founder of Coleman Publishing, a firm in La Canada, Calif. that tracks and reports government-guaranteed lending activity. Previous government programs, including last summer's emergency-loan ARC program, have taken time to ramp up, as banks must evaluate the rules and -- if they decide to participate -- prepare their internal systems to support it. Even if Mr. Obama's plan successfully launches by year's end, there could be a dip in SBA lending for weeks or months until risk-averse banks engage, Mr. Coleman says. . . . keep reading Small Business Gets Its Bailout - Reuters After having watched Wall Street get a near $1 trillion bailout, America's reeling small businesses will get their own relief package from Uncle Sam, in the form of the "Small Business Financing and Investment Act" that was passed by the House of Representatives last night by a 389-to-32 majority vote. . . . keep reading Rep. Vel�zquez on Legislation Expanding Small Business Lending By improving the 504 program, this bill gives them the flexibility to purchase new equipment and otherwise retool operations. When paired with new initiative like the New Markets Venture Capital and Renewable Energy Capital Investment programs, these efforts will help manufacturers emerge from the downturn stronger and better poised to create new jobs. Meanwhile, we are also delivering important lending options to our nation's veterans, offering reduced borrower fees and increased loan guarantees. As our service men and women return home from deployment abroad, we need to be sure they have access to the economic opportunities that entrepreneurship offers. . . . keep reading More

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