Congress-SBA vs Direct Loan Programs

Congress-SBA vs Direct Loan Programs
by Patrick Cherf

I feel I need to tell this story so others with a disability may identify with what I am going through.

This may shock you but, did you know that congress has discontinued all the direct loan programs 1995? These programs were wonderful tools for vets who wanted to start their own business. They were discontinued at the bankers request. The direct loan programs made it possible for a vet to borrow up to $50,000. dollars and pay only a 4% interest.

That made it much easier to pay back the loan while growing the business. People who enlist to defend our country and go off to war don’t know if they will come home or how they are going to come home. Some will come home with parts missing but, they will still have the skills they had before they went in. Some may need these direct loan programs so they can use those skills in doing a job where they like getting up in the morning and going to work.

Cherf Saw & Tool Service is a sixty six year old staple in Milwaukee and surrounding areas. The business was started by a colorful man by the name of Laddie Cherf my Father. He was a master cutting tool sharpener and repairman…

He turned the business over to his youngest son in 1989 who he trained for a life time. His son Patrick (me) is the only sharpener that can make the claim that he was trained by a master sharpener. Laddie died in 1997 and Wisconsin lost a great asset but, I am trying to carry on the tradition of giving his customers the high quality sharpening that my father gave.    

I am a veteran with a disability; not a disabled veteran. I have fought for the past sixteen years to get a direct loan from the SBA or an SBA loan from the banks that are supposed to service these loans. This is where the word “trying” comes in.  I was trying to get a veterans direct loan or a handicapped assisted direct loan but, all I got was shouted at from an SBA loan counselor who “shouted all I would do with the money was to spend it.” How foolish of me to think that was what working capital was for: to spend so the business could grow.  This was in 1992 since then I have been directed to SCOR where I was told I would get the help I needed. The old executives that run SCOR mean well but they just could not help me to get the working capital I needed to make this business grow. 

I worked for a large corporation for many years while keeping my hand in the shop. In 1981 while working on a very heavy job using a crane I had an accident where I severely injured my back. I was off on sick leave for many months when I was called back to light duty and was told that right now the company didn’t have any light duty jobs and I was layed-off. I became what is known as a throwaway. I spent a lot of time in rehab and in a DVR job club looking for work but, at that time you couldn’t get a job if you had a back injury. 

I was a throwaway with many skills none of which I could use but I thought I did have a small business and I was good at what I did there. So I kept trying for one of the direct loan programs that the government offered veterans or people with a disabilities. 

In 1995 our Representatives in all their wisdom stopped funding these programs. These programs were wonderful tools for veterans and people with disabilities. Most people with a disability has poor credit and may be on some type of welfare. No bank will give them a loan. Banks are cold when it comes to the money they loan and if they feel in any little way that they won’t be repaid they will not make that loan. 

On the other hand the direct loan programs gave a person with a disability and poor credit a chance to stay or become independent. These programs offered a 4% return on the dollar which made it possible to repay the loan while growing the business. You may not feel that these programs are important but, there are thousands of people that want to work but can’t find work; these people have skill and can’t use them because of a disability. In my opinion it was the banking lobbyist that “made” congress stop funding these programs. 

Cherf Saw & Tool Service may have to close the door and end an area because of poor cash flow. I have been working on a shoe string for the past sixteen years. Because of a robbery in July of this year that shoe string was broke and so is the business. If I can’t find some help real soon I will have to close.  

There is a watch dog organization that is trying to make the SBA do the job that it was commissioned to do and, that mission is to help small business grow not to lend money to large corporations which they are doing right now. The organization is known as ASBL or The American Small Business League. 

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In response to Mr. Cherf’s letter, VT has partnered with Pioneer Military Lending to promote their loan programs.  Obviously, this isn’t a replacement for a direct loan program but it’s a start and we believe it will help.  Please let us know about your experience with Pioneer Military Loans by sending an email to our General Manager at [email protected]