Charlotte-area banks unsure about ARC loans - Phoenix Business Journal:

http://www.ciydc.org/article/Thats-the-view-of-transport---.html
But Charlotte-area banks aren’t yet sure they want to sayingthey haven’t yet seen enough details abouyt the SBA initiative. The SBA recently unveiled plans tooffed no-interest, no-fee, deferred-payment loans to small companies as part of the American Recoveru and Reinvestment Act. The $350 million loan program is called America’s Recovery Capital Loan Program. It’s distributed by commercial lenders, and the debt is 100% guarantee by the SBA. The SBA will pay interesft to the participating lenders on behalt ofthe borrowers. To qualify for an ARC loan, companiexs must demonstrate theyare “viable, for-profir small businesses ...
and are experiencingt immediatefinancial hardship,” the SBA says. The loanz are for up to $35,000. They must be used to make paymentsa on existing debt so the business can use its revenues to fund otheroperational expenses. Repayment can be deferredc for up to12 months. It’s part of the SBA’w expanded effort to help small businesses navigatethrough recession-related distress. The program is scheduled to launchJune 15. But lenderd aren’t ready to commity to it. Area bankers are asking how they’re suppose to determine what qualifies asa “viable” businesss that’s experiencing “immediate financialo hardship.
” And bankers also say they stillk don’t know what interest rates the ARC loands will carry — a key piece of informatioh in determining their level of participation. “We’re studyinv it,” says John Guy, seniot vice president of SBA strategiesat . “Thes timeline didn’t quite accommodate all the lenderws that need thespecific details.” Guy notee Fifth Third has launched an effort to boostg its SBA lending. And he says customers are already asking the bank about the ARC Buthe can’t give them many answerws until he learns what interest rate the SBA will pay on the along with other details.
“We’re askinyg people to be patient,” he says. “The presa is way ahead of the George McAllister, regional director of the , says he gets callse on a regular basis from businesds owners interested in the loans. “Basefd on what I know right now, I thin k it will be a very populad program,” he says. “It certainly fits a At , Chief Executive Scott Anderson says his teamof small-business bankers recently attended an informational sessiob on the ARC program but left unsure of key “Our comments echo everyon else,” he says. “There’s not even a standarc definitionof what’s a viable company.
” SBA spokeswoman Eileen Joycer says the viability question is a determination for lendersx to make at their discretion. Her agench is working as fast as possible to get othef details to lenders byJune 15. She says the ARC program is a challenge forSBA officials, too, because it’s the firstr of its kind. She says Charlotte-area banke “are all in a wait-and-see mode” on whethedr they’ll participate. “It’s a whole differeny way of putting together aloan deal. That’s the hard Joyce says small-business owners are “very about the program, hoping it will roll out in time to meet theitgrowing needs.