Apr 15 2009
By Caitlin Sullivan, Southwest Virginia Today
Over an iced mocha and blueberry muffin, U.S. Sen. Mark Warner sat down at Zazzy’Z Coffeehouse in Abingdon on Tuesday morning and talked with a handful of small business owners and banks about the economy.
“This may be one of the first times you have a politician here that’s not coming here to talk,” Warner said. “What I wanted to do this morning is hear what your concerns are.”
He said he wanted to know what the federal government can do and if any of the people at the table had seen any opportunities through the U.S. Small Business Administration.
The meeting was one of 17 events in the senator’s four-day sweep of the state to hear from Virginians about the economy and highlight local organizations and programs that can benefit from recent actions taken by Congress. Warner serves on the Committee on Banking, Housing & Urban Affairs, Committee on the Budget, Committee on Commerce, Science & Transportation and the Committee on Rules & Administration.
In February, the American Recovery and Reinvestment Act was signed into law. Included in the Recovery Plan is the elimination of fees for borrowers and lenders and raises the guarantees on Small Business Administration loans to 90 percent that previously ranged from 75 to 85 percent.
Although the meeting was designed to focus on new loan programs rolling out through the Small Business Administration the discussion also turned to health care, schools and unemployment.
John Rock of First Bank & Trust said he’s concerned about the unemployment rate that’s hit double digits in some parts of Southwest Virginia.
Warner said compared to the rest of the state Southwest Virginia is doing relatively well especially in regards to the real estate market that’s up 6 percent.
“I think by mid-June and July we ought to see this bottom out,” Warner said. “Stimulus money will be flowing. I hope.”
“We’ve kind of used up a lot of bullets,” he added. “A lot of this stuff the government hasn’t tried before. A lot of the time I’ve had to swallow hard because this isn’t the usual way we do business.”
“We need to make banking boring again,” Warner declared.
He said there’s a balancing act the government has to play.
“We want to get this money out as quickly as possible but the last thing we want is to not have accountability,” he said.
Abingdon Mayor Ed Morgan and Delegate Joe Johnson also attended the meeting, along with representatives from Highlands Union Bank, First Bank & Trust and Small Business Development Center Director Jim Tilley.
Tilley said he’s seen one Small Business Administration loan go through in the past month for business expansions.
“This shows that our local banks do have money to lend for good projects,” he said. “The banks know the (local) business climate.”
But there are some snags with some of the new loan programs.
He said there are some programs that are out there he couldn’t find an application for like the America’s Recovery Capital Stabilization loan program, a debt repayment program.
“We know the money is in place but we don’t have the rules and protocol,” he said.
According to the Small Business Administration Web site, America’s Recovery Capital Stabilization loan program will offer deferred-payment loans of up to $35,000 backed 100 percent by the Small Business Administration to businesses that need help making payments on an existing, qualifying loan for up to six months. It’s intended to give small businesses some temporary financial relief. Repayment doesn’t begin for a year after loan is fully disbursed.
Susan Taylor, assistant to the vice-president of Highlands Union Bank, said she’s been doing Small Business Administration loans through banks for eight or 10 years. She said she’s seen loans slow down in the past year but since March she’s seen interest pick up.
“More people are inquiring about the programs,” Taylor said. “I’ve gotten a lot of calls.” She said recently she hasn’t seen very many new business loans but mostly loans for existing companies to help with working capital.
One man came into the coffee shop and said, “I’m 75 years old and I’m only interested in health care, not making money.” He said he wanted to know what the senator thought about the health care system and how he’d fix it.
Warner said he doesn’t believe in a universal health care system.
“I don’t think the solution is a government-assistance program,” Warner said. “I still believe the competitive system works.”
“We don’t have a choice to go to the hospital when we’re sick like we do when we choose to buy something,” the man said. “Insurance companies are taking all the profits and then pretending to be covering people. Insurance companies are racketeering.”
The man then walked out of the coffee shop.
“Nobody’s got the perfect health care system but this isn’t working,” Warner said.
Sam Morenings of Universal Printing in Bristol, Va. said he’s concerned about health care for his employees. He’s been in business 22 years and said his company does not cover his six employees health insurance but it’s hard because he can’t complete with the larger companies who provide benefits.
For more information visit http://www.sba.gov.