Small business poll shows gloomy outlook
On June 15, 2009 the Small Business Administration unveiled the much anticipated “ARC” (American Recovery Capital Loan Program) to reportedly help small business during the current recession. This program is intended to offer up to a maximum of $35,000 to qualified small businesses facing immediate hardship.
We conducted a nationwide survey of SBA authorized lenders as well as small businesses. Below are some highlights from this research.
- 81% of the approved SBA lenders advised that they were not currently participating in the ARC program, and had no date as to if, and when they might.
- Of the 19% who said that they were taking part in this program, 96% told us that they had little understanding of the program, and/or support from the SBA on how to properly process the requested loans.
- 100% of the participating ARC lenders advise that there is a major conflict as to whose forms (SBA or bank) should be used for the application.
- Of those banks actively participating in the ARC program, 96% admit that they are doing so reluctantly.
- 89% of reporting small businesses advise that they are confused about the ARC program and have been unable to get intelligible information from the SBA or lenders.
- The majority of those responding advise that they were overwhelmed with the paperwork requirements of the ARC loan and that it would cost them money for a CPA or accountant to help them prepare the loan request.
- When asked about the state of their business, 68% of small businesses admitted they were “hanging on by a thread.”
- 82% of participating small businesses advise that they have no confidence that President Obama and/or Congress will deliver meaningful relief to small firms.
- Regarding hiring, 78% of small businesses responded that they have cut their plans to hire additional staff and will rely on independent contractors as-needed.
- 56% of the small companies who responded have laid off employees, and of those, 48% plan to lay-off more staff within the next 30 days.
- 55% of the polled firms advise that they may be forced to file for bankruptcy within the next 30-60 days.
We had hoped for better results!
