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

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But Charlotte-area banks aren’t yet sure they want to sayingthey haven’t yet seen enough details about the SBA initiative. The SBA recentlyt unveiled plans tooffeer no-interest, no-fee, deferred-payment loans to small companiese as part of the American Recovery and Reinvestmeny Act. The $350 million loan program is called America’zs Recovery Capital Loan Program. It’ws distributed by commercial and the debtis 100% guaranteed by the SBA. The SBA will pay interest to the participating lenderd on behalf ofthe borrowers. To qualify for an ARC loan, companie must demonstrate theyare “viable, for-profi t small businesses ...
and are experiencing immediatefinanciapl hardship,” the SBA says. The loanss are for up to $35,000. They must be used to make paymenta on existing debt so the business can use its revenuew to fund other operational Repayment can be deferred for up to12 It’s part of the SBA’es expanded effort to help smalll businesses navigate through short-term, recession-related The program is scheduled to launchb June 15. But lenders aren’t readyg to commit to it. Area bankerss are asking how they’re supposed to determinse what qualifies asa “viable” businese that’s experiencing “immediate financial hardship.
” And bankers also say they stilpl don’t know what interest ratess the ARC loans will carrgy — a key piece of informationm in determining their level of participation. “We’re studying says John Guy, senior vice president of SBA strategiesat . “Th timeline didn’t quite accommodate all the lenders that need thespecififc details.” Guy notes Fifth Third has launchex an effort to boost its SBA And he says customers are already askingv the bank about the ARC program. But he can’tg give them many answers until he learns what interest rate the SBA will pay on the along withother details.
“We’rre asking people to be patient,” he says. “Thse press is way ahead of the George McAllister, regional director of the , says he gets calld on a regular basis from business owners interested in the loans. “Based on what I know righft now, I think it will be a very popular program,” he “It certainly fits a need.” At , Chiefc Executive Scott Anderson says his teamof small-businessa bankers recently attended an informational session on the ARC prograjm but left unsure of key information. “Oue comments echo everyone else,” he says. “There’se not even a standarx definitionof what’s a viable company.
” SBA spokeswomaj Eileen Joyce says the viability question is a determination for lenders to make at theird discretion. Her agency is workinb as fast as possibles to get other details to lenderw byJune 15. She says the ARC program is a challengd forSBA officials, too, becauss it’s the first of its kind. She says Charlotte-areza banks “are all in a wait-and-see mode” on whether they’l l participate. “It’s a whole different way of puttingf together aloan deal. That’s the hard part.” Joycew says small-business owners are “very anxious” about the program, hoping it will roll out in time to meet theiergrowing needs.