By The New York Times
I was reading this article over at newyorktimes.com and thought this is a great article discussing a drawback of the so-called economic stimulus program.
“When Barbara Wright learned last year of a federal program to aid struggling small businesses like her South Side uniform company, she jumped at the chance to apply for the Small Business Administration loan.
“I thought I could use the loan to help my cash flow,” the soft-spoken Ms. Wright said as she pointed toward racks of uniforms at The Wright Fit, her store at 1805 West 95th Street. “You know you have to pay for this, and when your customers are taking 30 to 120 days to pay their invoices, things can get tight.”
So she went to her bank, ShoreBank, which helped prepare the paperwork, and she sent in her application. It was approved, and Ms. Wright borrowed $35,000, the maximum allowed under a special Obama administration 2009 economic stimulus program for small businesses.
She thought she could use the money to meet her cash needs, but she soon learned that the loan had a catch: It could not be used for operations. In fact, the money could be used only to help pay off a previous loan of $50,000 from ShoreBank.”
Read more at nytimes.com
