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Bank CEOs Face Congressional Music On Business Loans
If you thought that the CEOs of the major domestic automakers had it bad, hold on tight because the bank CEOs whose firms received a slice of last year’s TARP bailout will be testifying in front of the House Financial Services Committee today. Lawmakers are expected to demand an accounting of what exactly happened to the bailout funds lavished on banks last year, and an explanation for why more of the Fed’s capital isn’t being plowed into
bank loans for businesses and consumers.
Congress has gotten more than an earful from ordinary people who wonder why the banks were not questioned as closely about the estimated $800 billion in TARP grants as automotive CEOs were grilled about their request for $25 billion in federal loans. Lawmakers will be looking for an accounting of how the TARP funds have been spent to date, and want answers about the excessively high bonuses that have been paid to bank executives since the TARP funds were released.
One burning question on the minds of lawmakers is how much of the funding has been offered to businesses and consumers in the form of loans. Among the nearly 400 recipients of the federal funds, only Citigroup has provided any information about how it has spent its TARP funding. Citi’s accounting shows that only about one-third of the money has been made available for loans.
Small businesses have been hit hard by the lack of capital available for operations and expansions in the last year. Nearly five percent of small businesses are now saying that loan availability is the single most important issue facing small businesses today. There is another source of funding for small businesses: a merchant cash advance.
Merchant cash advances are available to any US business that accepts Visa and MasterCard and has at least $2,500 per month in credit card transactions. Merchant cash advances have a limit of $250,000, so you can get the cash you need when you need it.
A merchant cash advance isn’t a loan. It’s a cash advance based on future sales. As your transactions are processed, your advance is repaid, with a small fee. There’s no monthly bill to pay, and 95% of all eligible merchants who request a cash advance get one. There’s no requirement that you have good credit, either.
If you’ve been the bank route and you’re still waiting for your cash, or you’ve been turned down by banks who won’t lend out their cash, don’t face the worst alone. Contact Rapid Capital Funding today!
Photo Credit: Chrisinphilly5448, via Flickr
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The us auto industry has been on its back for several years now. The situation has accelerated with the most recent credit meltdown and all three are running to capital hill seeking a bailout. It seems like under the current circumstances this request should be met with a resounding YES. If any of you paid attention last week to the latest jobless claims, over 500k for the month!
Well what are we missing? The worst financial crisis since the great depression, staggering unemployment, ECT. ECT. ECT…… Then why do the big three have to get down on their hands and knees and beg? Did AIG have to beg? Did Citigroup? The list goes on and on. The largest manufacturing industry in our nation that represents over 4 million US jobs and our government might let them go bankrupt.
There must be a better way. If I where in charge here is what I would do;
I would give them a small short term bridge loan so that they could survive over the next couple months and meet obligations. During this period I would require them to hire bankruptcy consultants and put together a plan for a packaged bankruptcy. The government would provide the financing to pull them out of bankruptcy. This would do a couple things.
Flickr Image by: Congressman Markey
It would allow the automakers to restructure with their creditors, unions, employees, and most importantly get rid of all the legacy liabilities that have been haunting them for years.
Give consumer the peace of mind that the big three will survive and come back stronger. This way we still buy cars from them because we know the government supports the industry and its survival. All warranties will be honored.
Once this is accomplished the entire industry will be poised for restructuring and will continue to thrive for many years.
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