If you don’t have an ARC loan, you’re not alone!

The America’s Recovery Capital (ARC) Loan Program was introduced in June 2009 by the US Small Business Administration “to provide up to $35,000 in short-term relief for viable small businesses facing immediate financial hardship to help ride out the current uncertain economic times and return to profitability.” Only 2715 loans had been approved through September 15 across the nation.

Catherine Clifford, writing in CNNMoney.com, explains that big lenders are foot-dragging or opting out from participating in this lending program altogether – there is a lot of paperwork for relatively little bank profit  -”only” 2 percentage points over prime from the SBA to the banks. (So much for anything resembling gratitude for the TARP money we taxpayers gave the banks!). One of the biggest shockers she uncovers is how few lenders are participating – only 400 lenders as of September. The SBA lists those lenders participating in the ARC pr0gram as of October 5 by state on their site.

Even if you do find a lender who participates, the process is taking months to get a response. Ironic, when one considers how quickly billions went to bail out Wall Street.

So good luck! But don’t count on this program to be a panacea for your business.

Angel Investing Down

Check out this article in Inc.com. Maybe not a huge surprise but economic uncertainty is impacting the private equity world. But there are some recession-resistent markets for startups that may disprove the rule: green technologies, renewable energy, and health care, to name but a few.

How Angel Investing Works – BusinessWeek (click to open link)

While VCs make much larger investments, angel groups give from around $25,000 to $50,000—and tend to want real involvement with the company

Here is a good brief by Tom Taulli that explains the difference between Angel Investors and Venture Capitalists. He also references some websites you can explore to locate a good fit angel group.

“Is your company looking for an equity investment under a few million dollars? You might first think of approaching venture capitalists, but I suggest you try angel groups. For the most part, VCs manage large pools of money—sometimes in excess of $1 billion—and do not have the time to deal with many investments. They prefer to make large investments that range from $5 million to $10 million per transaction.”

“Angels, on the other hand, are wealthy individuals who invest funds in early-stage companies (BusinessWeek, 4/17/08). The amounts often range from $25,000 to $50,000 per deal. Over the past decade, angel investors have formed angel groups that meet either monthly or quarterly—and pool together their deal flow, resources, and capital.”

(Via .)

Unless you’ve been in a cave for the past month, you know we are in the midst of a credit crisis.

And if you’ve been watching TV, listening to the radio, reading the newspaper, or looking at the Web, you realize that the credit crisis has hit small business owners particularly hard.

So what can small business owners do to cope with the crisis? Scott Shane offers a few suggestions in this article (link will open new page):

1. Extend less credit to your customers.
2. Borrow from different sources.
3. Bootstrap, or raise equity.
4. Cut your costs.
5. Sell Assets.

Small Businesses Feeling the Chill | NYTimes.com

Did you see this article in the New York Times? Most entrepreneurs don’t need the newspaper to tell them that something has happened in the credit markets and it isn’t good.

Despite the media predictions, there are some banks that are lending to small businesses. Look for lenders who didn’t get in deep with subprime mortgages. Yours must be a basically healthy and growing concern, and your business plan needs to be current.

And folks are turning to bank alternatives: peer-to-peer lending, credit unions, factoring to name just a few that are mentioned in this Wall Street Journal article: How To Cope with the Credit Crunch.

Ask us for help maneuvering this maze.

Online Matchmakers Introduce Entrepreneurs to Investors | NYTimes.com

In this day of fewer and fewer funding options for smaller businesses, meeting investors becomes an ever-growing alternative to conventional lenders. This article explains various options for getting connected with online services that are popping up.