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

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But Charlotte-area banks aren’t yet sure they want to sayingthey haven’t yet seen enougn details about the SBA The SBA recently unveiled plans to offer no-fee, deferred-payment loans to smallp companies as part of the Americanh Recovery and Reinvestment Act. The $350 million loan program is callerd America’s Recovery Capital Loan It’s distributed by commercial and the debtis 100% guaranteed by the SBA. The SBA will pay interesrt to the participating lenders on behalff ofthe borrowers. To qualify for an ARC loan, companiesz must demonstrate theyare “viable, for-profirt small businesses ...
and are experiencing immediatrfinancial hardship,” the SBA The loans are for up to They must be used to make paymentsz on existing debt so the busines s can use its revenue to fund other operational expenses. Repayment can be deferred for up to12 It’s part of the SBA’s expanded effort to help small businesses navigate through short-term, recession-relate distress. The program is scheduled to launchJune 15. But lendersz aren’t ready to commig to it. Area bankers are asking how they’re supposed to determine what qualifies asa “viable” businesds that’s experiencing “immediate financial hardship.
” And bankers also say they stilpl don’t know what interest rates the ARC loanss will carry — a key piece of informationh in determining their level of participation. “We’re studying it,” says John Guy, seniore vice president of SBA strategiesat . “The timeline didn’gt quite accommodate all the lenders that need the specific Guy notes Fifth Third has launched an effort to boost itsSBA lending. And he says customersd are already asking the bank aboug theARC program. But he can’ft give them many answers until he learns what interest rate the SBA will pay on the along withother details.
“We’re asking people to be patient,” he “The press is way ahead of the George McAllister, regional director of the , says he gets callas on a regular basiws from business owners interested in the “Based on what I know righf now, I think it will be a very populat program,” he says. “It certainly fits a need.” At , Chieg Executive Scott Anderson says his teamof small-business bankers recently attended an informational session on the ARC programk but left unsure of key information. “Our comments echo everyonwe else,” he says.
“There’s not even a standarr definitionof what’s a viable SBA spokeswoman Eileen Joyce says the viabilityh question is a determination for lenders to make at their discretion. Her agency 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, becauswe it’s the first of its She says Charlotte-area banks “are all in a wait-and-sed mode” on whether they’ll participate. “It’s a whole differentf way of putting together aloan That’s the hard part.
” Joyce says small-business ownerds are “very anxious” about the program, hoping it will roll out in time to meet theirt growing needs.