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    Microlending Program To See 60% Default

    By Marc Tracy

    Well, we were skeptical of America's Recovery Capital from the beginning. The program has the Small Business Administration guaranteeing 100% of small loans (capped at $35,000) made to "viable" small businesses that are trying to pay off pre-existing debt. We wondered how useful the program was; we wondered whether it was really trying to help small businesses or banks; and we wondered whether banks would participate without much incentive to do so. Now, today, the Washington Post reports that 60% (!) of all ARC loans are expected to default.

    Turns out the program's genesis was as a way to help the noble lobstermen of Maine--which is to say, to garner the crucial vote of Sen. Olympia Snowe (R-Me.) back when the stimulus act, which estabished ARC, was being debated last winter. But now, it's a shambles. The good news is that only a quarter-billion was devoted to the program (which, in federal-outlay terms, isn't all that much). The bad news is that it's going to be very difficult to halt it prematurely. The only use ARC can have is as a warning to discourage similar, future programs. So don't forget the foul acronym!

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    November 6, 2009 10:47 AM

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    The Purpose Linked Organization

    by Alaina Love

    On Tuesday, July 14 earn how to harness your employees' passions so that they further your own.

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