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#12
posted to rec.boats
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Small Business loans
On Fri, 10 Apr 2020 07:44:27 -0400, "Mr. Luddite" wrote:
On 4/9/2020 7:55 PM, wrote: On Thu, 9 Apr 2020 13:24:03 -0400, "Mr. Luddite" wrote: On 4/9/2020 1:09 PM, wrote: On Thu, 9 Apr 2020 01:03:14 -0400, "Mr. Luddite" wrote: On 4/8/2020 10:57 PM, wrote: On Wed, 8 Apr 2020 07:25:06 -0400, "Mr. Luddite" wrote: The loans being offered to small businesses as an inducement to keep their employees employed is running into some major problems because of the way Congress wrote the $2T package. One problem is a result of the Dems insistence that unemployment benefits be increased to the point where laid off employees can receive more money in benefits than they earned at their jobs. If a small business owner applies for the loan and he/she can convince the employees to stay employed, the loan becomes a grant. If the employees decide to collect instead, the loan becomes what it is ... a loan that has to be repaid. Another problem is how the money from the SBA is distributed. A certain percentage can be applied to payroll, another percentage towards rent, etc. In high rent areas, there's not enough money to pay both rent and the employee wages. We can thank you know who for this ..... The other problem is there is no protection for the bank for fraud so they will have to go through the same qualification regimen as they go through when they are loaning their own money because if the loan blows up, it is their money. This means, if you don't already have a credit line with the bank, they are going to be looking through your books like they would if you just walked in off the street. With the shutdown, that will take a while. Technically, they are supposed to be government backed loans, similar to a VA loan. The problem for the bank is there is no accommodation for fraud on the part of the borrower. If the loan defaults and the borrower lied on the loan application, being ineligible, the bank is on the hook for it so they still need to vet the loan, just like they would if it was their money. At least that is the way I heard it described. Using your analogy, it would be like if the borrower presented as a veteran and wasn't. The VA might not figure it out until the loan went into default and the bank came looking for government relief. Don't know how the VA works today for their guaranteed loans. I bought my first house under the GI bill with a VA guaranteed loan but that was over 40 years ago. I know I had to prove that I was a veteran and the VA confirmed with their records but after that it was duck-soup. That still takes time and in this shut down that is longer than the distressed businesses think this should take. That VA thing was a fairly easy thing to prove too. When you are assessing the bona fides of a business you have never heard of, it will take longer. Most of these small businesses probably didn't pay for a Dunn and Bradstreet rating. I would not be surprised if a lot of store fronts in Miami borrow the ten grand and open up down the street with a different name, stiffing the bank. That is how the Medicare (pay and chase) scams seem to work. Could be. My experience in dealing with the VA for a VA backed loan for our first house after I got out of the Navy was over 40 years ago. It wasn't a difficult or time consuming then. I applied for the VA backed loan through a bank. A representative from the VA contacted me within days and scheduled a "look-see" of the house we were buying. He showed up within a few days, looked at the house from the driveway (never went in) and said, "Yup, it looks like it's worth the price". About a week later the loan officer at the bank called and said the loan was approved. Other than meeting the VA representative in the driveway, I had no other contact with them. I've bought two houses through VA. Other than waiting to ensure the appraisal was satisfactory, I had no dealings with them. I was on active duty at the time, so I guess a picture of my ID card sufficed. -- Freedom Isn't Free! |
#13
posted to rec.boats
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Small Business loans
On 4/10/2020 8:56 AM, John wrote:
On Fri, 10 Apr 2020 07:44:27 -0400, "Mr. Luddite" wrote: On 4/9/2020 7:55 PM, wrote: On Thu, 9 Apr 2020 13:24:03 -0400, "Mr. Luddite" wrote: On 4/9/2020 1:09 PM, wrote: On Thu, 9 Apr 2020 01:03:14 -0400, "Mr. Luddite" wrote: On 4/8/2020 10:57 PM, wrote: On Wed, 8 Apr 2020 07:25:06 -0400, "Mr. Luddite" wrote: The loans being offered to small businesses as an inducement to keep their employees employed is running into some major problems because of the way Congress wrote the $2T package. One problem is a result of the Dems insistence that unemployment benefits be increased to the point where laid off employees can receive more money in benefits than they earned at their jobs. If a small business owner applies for the loan and he/she can convince the employees to stay employed, the loan becomes a grant. If the employees decide to collect instead, the loan becomes what it is ... a loan that has to be repaid. Another problem is how the money from the SBA is distributed. A certain percentage can be applied to payroll, another percentage towards rent, etc. In high rent areas, there's not enough money to pay both rent and the employee wages. We can thank you know who for this ..... The other problem is there is no protection for the bank for fraud so they will have to go through the same qualification regimen as they go through when they are loaning their own money because if the loan blows up, it is their money. This means, if you don't already have a credit line with the bank, they are going to be looking through your books like they would if you just walked in off the street. With the shutdown, that will take a while. Technically, they are supposed to be government backed loans, similar to a VA loan. The problem for the bank is there is no accommodation for fraud on the part of the borrower. If the loan defaults and the borrower lied on the loan application, being ineligible, the bank is on the hook for it so they still need to vet the loan, just like they would if it was their money. At least that is the way I heard it described. Using your analogy, it would be like if the borrower presented as a veteran and wasn't. The VA might not figure it out until the loan went into default and the bank came looking for government relief. Don't know how the VA works today for their guaranteed loans. I bought my first house under the GI bill with a VA guaranteed loan but that was over 40 years ago. I know I had to prove that I was a veteran and the VA confirmed with their records but after that it was duck-soup. That still takes time and in this shut down that is longer than the distressed businesses think this should take. That VA thing was a fairly easy thing to prove too. When you are assessing the bona fides of a business you have never heard of, it will take longer. Most of these small businesses probably didn't pay for a Dunn and Bradstreet rating. I would not be surprised if a lot of store fronts in Miami borrow the ten grand and open up down the street with a different name, stiffing the bank. That is how the Medicare (pay and chase) scams seem to work. Could be. My experience in dealing with the VA for a VA backed loan for our first house after I got out of the Navy was over 40 years ago. It wasn't a difficult or time consuming then. I applied for the VA backed loan through a bank. A representative from the VA contacted me within days and scheduled a "look-see" of the house we were buying. He showed up within a few days, looked at the house from the driveway (never went in) and said, "Yup, it looks like it's worth the price". About a week later the loan officer at the bank called and said the loan was approved. Other than meeting the VA representative in the driveway, I had no other contact with them. I've bought two houses through VA. Other than waiting to ensure the appraisal was satisfactory, I had no dealings with them. I was on active duty at the time, so I guess a picture of my ID card sufficed. I had just left active duty. A copy of my DD-214 was included with the bank loan application. Never dealt with the VA at all except for meeting with the guy from the VA who took a look at the house. The bank must have contacted the VA for this because I did not. -- This email has been checked for viruses by AVG. https://www.avg.com |
#14
posted to rec.boats
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Small Business loans
On Fri, 10 Apr 2020 07:44:27 -0400, "Mr. Luddite"
wrote: On 4/9/2020 7:55 PM, wrote: On Thu, 9 Apr 2020 13:24:03 -0400, "Mr. Luddite" wrote: On 4/9/2020 1:09 PM, wrote: On Thu, 9 Apr 2020 01:03:14 -0400, "Mr. Luddite" wrote: On 4/8/2020 10:57 PM, wrote: On Wed, 8 Apr 2020 07:25:06 -0400, "Mr. Luddite" wrote: The loans being offered to small businesses as an inducement to keep their employees employed is running into some major problems because of the way Congress wrote the $2T package. One problem is a result of the Dems insistence that unemployment benefits be increased to the point where laid off employees can receive more money in benefits than they earned at their jobs. If a small business owner applies for the loan and he/she can convince the employees to stay employed, the loan becomes a grant. If the employees decide to collect instead, the loan becomes what it is ... a loan that has to be repaid. Another problem is how the money from the SBA is distributed. A certain percentage can be applied to payroll, another percentage towards rent, etc. In high rent areas, there's not enough money to pay both rent and the employee wages. We can thank you know who for this ..... The other problem is there is no protection for the bank for fraud so they will have to go through the same qualification regimen as they go through when they are loaning their own money because if the loan blows up, it is their money. This means, if you don't already have a credit line with the bank, they are going to be looking through your books like they would if you just walked in off the street. With the shutdown, that will take a while. Technically, they are supposed to be government backed loans, similar to a VA loan. The problem for the bank is there is no accommodation for fraud on the part of the borrower. If the loan defaults and the borrower lied on the loan application, being ineligible, the bank is on the hook for it so they still need to vet the loan, just like they would if it was their money. At least that is the way I heard it described. Using your analogy, it would be like if the borrower presented as a veteran and wasn't. The VA might not figure it out until the loan went into default and the bank came looking for government relief. Don't know how the VA works today for their guaranteed loans. I bought my first house under the GI bill with a VA guaranteed loan but that was over 40 years ago. I know I had to prove that I was a veteran and the VA confirmed with their records but after that it was duck-soup. That still takes time and in this shut down that is longer than the distressed businesses think this should take. That VA thing was a fairly easy thing to prove too. When you are assessing the bona fides of a business you have never heard of, it will take longer. Most of these small businesses probably didn't pay for a Dunn and Bradstreet rating. I would not be surprised if a lot of store fronts in Miami borrow the ten grand and open up down the street with a different name, stiffing the bank. That is how the Medicare (pay and chase) scams seem to work. Could be. My experience in dealing with the VA for a VA backed loan for our first house after I got out of the Navy was over 40 years ago. It wasn't a difficult or time consuming then. I applied for the VA backed loan through a bank. A representative from the VA contacted me within days and scheduled a "look-see" of the house we were buying. He showed up within a few days, looked at the house from the driveway (never went in) and said, "Yup, it looks like it's worth the price". About a week later the loan officer at the bank called and said the loan was approved. Other than meeting the VA representative in the driveway, I had no other contact with them. The VA home inspection in DC was more like what an insurance company does on a "4 point" inspection. They had a check list and actually inspected. (that might just be a DC thing) I know the builder said the house I bought in 1971 probably wouldn't pass VA. I ended up with a better deal anyway because I had 30% down. VA was 7.5%, with no money down. I got 7.25%. Originally it was supposed to be 7% but the contractor screwed up something at his bank and by the time it got straightened out I had 7.25% from my MILs bank (Riggs). I was already living there and they couldn't really get me to move, according to a lawyer at Riggs, so I had a motivated seller. He knocked off $3000 to close the deal. That was almost 10% off I found out later, the reason it wouldn't pass was we had fuses. I doubt you see that from the driveway. That was the only 200a panel I ever saw with fuses in it. It did have the "S" adapters that would make it legal today. There wasn't really much recourse since the builder made other bad business decisions in that time frame and ended up bankrupt, then he shot himself. My punch list was never addressed. I fixed most of it myself. I bet there is still a bad piece of casing in the guest bedroom. :-) |
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