James Hernandez, Vice President at First Community Bank in Santa Fe

When the economy sours, many businesses cut back on services they consider nonessential. The most shortsighted companies lump customer service into the “expendable” category.

What these businesses don’t understand is that consumers tend to remember the people and businesses that help them through tough times.  It might be a business that provides a vital, one-time service or it might be a store the customer visits often, such as a grocery or hardware store.

The store that employs enough people to prevent backups in the checkout lines and to answer customers’ questions is the store most likely to survive a recession because it’s demonstrating a respect for its customers’ time and energy at a time when many stores are trying to limp along with skeleton crews. Continue reading →

David Valdez, Vice President Small Business Lending, Century Bank

Despite signs that the recession is easing in some quarters, many small businesses continue to struggle to pay off business-related debt. America’s Recovery Capital Loan Program — better known as the ARC loan program — can provide up to $35,000 in short-term relief to help qualified small businesses return to profitability.

The program was authorized by the American Recovery and Reinvestment Act, which became law in February. ARC loans are being offered by various Small Business Administration lenders until September 30, 2010, or as long as the money lasts.

How to qualify

To qualify for an ARC loan, the business must have been in operation for at least two years and have financial statements or tax returns showing profitability or a positive cash flow in at least one of the past two years. The business must be able to project sufficient cash flow to meet its business-related debts in the future.

ARC loans aim to help small-business people pay down or refinance existing business loans so they can redirect cash flow from making loan payments to investing in their businesses. The borrower must not be more than 60 days past due on any loan being paid with ARC funds. The business owner also must prove immediate financial hardship in the form of declining sales, frozen credit or difficulty meeting payroll or payments on rent or loans.

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Leslie Hoffman, Vice President of Lending and Client Service, ACCION New Mexico

Those who spend their careers watching the economy contract and expand agree on at least one thing: a person’s credit score is important in any economic cycle.  Before extending credit to an individual or business, bankers want to review the borrower’s credit report and know their credit score.

Financial institutions verify credit through reports that reflects how an individual has handled his debts.  Three national companies – Equifax, Experian and Transunion – track credit and produce reports.  All include similar information.

Report elements include personal information such as Social Security number and employment record, borrowing history, a record of creditors who have reviewed the credit history, and other public information such as foreclosures or bankruptcies.

Credit scores generally range from 350 to 850 points, with most people scoring in the 600 to 700 range. A high score indicates good credit. Lenders review credit scores to determine loan amounts and interest rates that will be charged, and a higher score usually yields more favorable loan terms.

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