Small Business Loans With Bad Credit

Sandy asks…

Does the government have Bipolar Bailout disorder? What is the best treatment?

As cornucopian benefits flow from Washington, Uncle Sam turns out to suffer from Bipolar Bailout Disorder. Like a taxpayer-funded Push Me-Pull You, he goes both ways while consuming enormous resources on the road to nowhere.

Today’s gargantuan mess started largely because Washington used Fannie Mae and Freddie Mac to promote affordable housing. “The more pressure there is on these companies, the less we will see in terms of affordable housing,” Rep. Barney Frank (D., Mass.) said in 2003. He described Fannie and Freddie as “fundamentally sound” and added: “I want to roll the dice a little bit more in this situation towards subsidized housing.”

Well, it worked. America is awash in affordable housing. Home prices in 20 major cities plunged 16.6 percent last quarter. That’s bad news if you’re selling, but a bonanza for those seeking affordable housing.

So, rather than declare “mission accomplished,” Uncle Sam has cannon-balled into the mortgage markets to jack up housing prices.

Which is it?

Last September 24, G.W. Bush claimed the $700 billion bailout would relieve distressed banks of “troubled assets that are clogging the financial system.” But just seconds later, Bush continued: “…the value of many of these assets will likely be higher than their current price, because the vast majority of Americans will ultimately pay off their mortgages.”

In that case, are these assets really troubled, or just hung over? If the latter, why not calm down, let them sleep it off, and then arise after a decent interval?

The Troubled Assets Relief Program then endeavored to rescue teetering banks. But to do so, Treasury dragooned prosperous banks into accepting bailout money so their needy competitors would not be stigmatized. This is like a supermarket whose affluent shoppers must accept and spend Food Stamps so low-income customers with Food Stamps don’t appear poor at the checkout stand.

“I think it’s absurd,” says the director of one small mid-Atlantic financial house. “We are a profitable bank. We have zero non-performing loans. We have more capital than we are required to have. We arguably are overcapitalized from an economic and a business point of view. Our only constraint on lending is the demand of credit-worthy borrowers. Our lenders are on the street every day, as they have been throughout this financial crisis, looking to make new loans. Despite that, we are being offered this relatively low-cost capital in the form of this preferred stock to be bought by the federal government.” This bank officer estimates that the Fed is ready to hand his hale and hearty institution between $4 million and $5 million.

This banker notes “the ironic escalation of the interest rate.” The terms of the loan, he marvels, are “five years at 5 percent, then it goes to 9 percent.”

In other words, Washington is giving banks adjustable-rate loans. This perfectly parallels the adjustable-rate mortgages that steered us into this ravine in the first place.

The whole article is good. It points out that despite the panic of passing $700 billion in bailouts immediately without review, Bush is leaving $350 to have Obama allocate them. The Federal Reserve is out of reserves, and the article says ‘this goes way beyond ‘show me the money’, now it is ‘throw me the money’.

Are we ready yet to demand fiscal accountability and transparency, at minimum of our government and the federal reserve? Would you back HR 2755 to abolish the fed that injected two TRILLION in credit recently, per Bloomberg, and refuses to say who got it?
TJTB – I hadn’t seen that. Makes me mad, but who DIDN’T see this coming at least for the last year, at least on SOME scale? I mean, say only the Austrian School devotees predicted the extent, EVERYONE knew subprime mortgage structures were bad. Where do they get off speculating in markets to begin with?

admin answers:


What’s most frustrating is the daily – if not hourly – discovery of yet another article or video showing a set of people in one party trying desperately to open the eyes of people of the other party on the issue. Dem’s demanding restraint as repubs fight it. Repubs demanding oversight of Fannie and Freddie as dems fight it.

What could be worse? That so many people remain unaware that Government – NOT an ‘opposing party’ – is the problem.

We are the solution.

Mary asks…

Do I pay taxes on a settlement against a bank?

I left my job of 10 years with Kraft foods, and moved to a small town because we were assuming a SBA loan to buy the towns grocery store. The local bank was handling it. The loan officer/ vice president told us everything was fine. We moved, got all of our licenses, permits, accounts with venders set-up…and even had meetings with the main food supplier. Everything seemed great. The banker even said we needed to get a life insurance policy for the amount of the SBA loan assumption, $300k . We were not rich, or even upper class. We managed to get togother around $18,000 after selling a camper and tax refund. We moved in July of 2008…and for 4 months all we heard from the bank was…”EVERYTHING IS FINE, JUST WAITING ON SBA REDTAPE”..I went against their wishes and called the SBA myself, only to realize… while the bank HAD talked and emailed the SBA about us…the bank NEVER ACTUALLY sent the paperwork in , or the formal written application. The bank tried to blame it on the SBA..and said they lost it. My question…”if the bank talked in emails and on the phone to the SBA like they.. AND the SBA said…wouldn’t it have come up in conversation sometime….”oh, there is no application”?..anyways, fast forward, we have a great case, I have a stack of emails from the bank…and they basically hung themselves for whatever reason. Our credit was ruined , I have not been able to find ANY work in about one year now, I’m 42 and factory is what I knew. Bad time to look for a job I know….This ruined us, our credit is terrible, we have 2 credit cards with less than $8,000..that we just cannot pay…we have went thru the money saved. we are getting food stamps and cash…any less man might have killed himself, or done something else stupid.
The business lawyer that set up our buying contract is handling this, and it looks like the bank is going to give in. We asked for $250k. The house we had before we couldn’t sell, the bank took it….no job for over one year, credit ruined(hard to put a value on ruined credit)…some money we did spend on this(computer, software…and what not)…anyways………..Is this settlement taxed? I’m not for sure , while part of it is for lost wages , some is recovery, and some is the ruined credit…and what we have had to go thru now….
we are in Missouri. There is a list of things the bank did to us..including possible fraud. Our attorney, said if it went to court…we could a jury trial even..
if my attorney fees are deductable…I don’t have money to pay him now, he is getting a % of settlement. I have had no income to pay ANY federal tax this year, my wife has worked part time at walmart..but they have not been taking any out either, we have needed every penny to live on..

admin answers:

Settlement for injury is not taxable. If it is for lost wages or interest, it is taxable. Attorneys fees are deductible if they are an attempt to get you taxable income otherwise they are not deductible.

Daniel asks…

Here is what i don’t understand. Please inform me?

I don’t understand how people on YA! get their information on the election. Almost anything you source with be considered a joke from either side.

Also, I have a question for Liberals. If you look on Barack Obama’s website you will see on his “Health care” issue that he wishes to have all companies provide health care benefits to their workers. Which in sense in a god thing….for the large national and world-wide companies. But what about the small close to home businesses, they wont be able to afford this kind of act to be put in which would increase the unemployment rate in this country and also if the larger companies must increase their coverage they would have to take in more money thus raising prices on their goods in which we the middle class would have to pay more for products and on top of that they may have to cut jobs again increasing the unemployment rate. It kinda is in the same boat as raising the minimum wage…that would also cause the same outcome. Its all basic economics.

One more thing that kinda bothers me..people who say only the rich vote republican..well for one I am far from rich. Second have you seen how Hollywood reacts to elections…very Liberal out there. Lastly how can you bash someone who works hard and get more money then you…I know you think we need to tax the rich and just give you the money (socialism) in which Obama wishes to do. But heres my advise get a good job and work hard and maybe you can make it rich..then lets see how you like it when they take your hard earned money away.

Stop blaming republicans for the economic crisis if you half a brain you would know its we as Americans did it. People giving loans to citizens who cant afford it..and going into debt, to include credit card debt.

Both candidates promote change…one is for is for the worse.

Give a good answer not some crap. Thank you. :)
To Ashley –

Very nice little comment. Thanks for answering the question. But i do disagree with his tax will affect us all. The raise on Capital gains and dividends with get us even those of middle class. Also if he taxes the people who make more money the 250k + those people are likely the ones who own these businesses so they may have to cut back on things such as jobs and salaries..also increasing the prices on which we will suffer.

I believe he will destroy this economy.

admin answers:

Crap is subjective, but you are you already knew that didn’t you?

I own and operate a small business and am not really wanting to spend more money on health insurance for my employees. In fact, why should it be the companies responsibility to pay for an individual’s health care? Being a left leaning independent, I believe the purpose of government is to provide those things which individuals cannot provide for themselves. That would include national defense, roads/highways, police and fire services, health care, etc. Having a national health care would not mean the end of private health care. We live in a capitalist nation as so long as there is demand for private health care, there will be private health care.

Republicans are often called the party of the wealthy. People who confuse rich and wealthy are simply making a mistake. And yes, there is a difference b/t rich and wealthy. Shaq is rich and the dude who signs his paycheck is wealthy.

I don’t bash people who work hard and have more money than me. The fact is there is only so much wealth in the world and when too much of it is in the hands of too few you get revolution. Always have and always will. I do believe the rich should pay a little more as they have more to give. And before you start assuming I want that money, I would very likely fall into the higher taxes category. I have a good job, I do work hard and I could be considered rich by some standards and yet here I am NOT complaining about higher taxes. What you are failing to see is that some people actually value other things more than money.

Our economy is completely dependent upon debt and that is just an unfortunate reality. If you doubt that, then think about how many people buy a new car or home with cash. The economic crisis is the result of banks and lenders giving loans to people they shouldn’t have, but the reason that happened was due to the deregulation of those industries and all that deregulation was the brainchild of conservative republicans. Yes, the bill was signed by Clinton but only after a long battle. Plus, it was proposed by a republican congress and that is why people blame the republicans.

Every candidate, save an incumbent, promotes change. That is how they get elected. You know, by promising to change things for the better. The difference is that conservatives by their very nature, and definition, prefer to maintain the status quo and are slow to change.

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