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 enougn details about the SBA initiative. The SBA recentlu unveiled plans tooffer no-interest, deferred-payment loans to small companies as part of the Americanh Recovery and Reinvestment Act. The $350 millionn loan program is called America’s Recovery Capitao Loan Program. It’s distributed by commercia lenders, and the debt is 100% guaranteed by the SBA. The SBA will pay interesr to the participating lenders on behalc ofthe borrowers. To qualif y for an ARC loan, companies must demonstratse theyare “viable, for-profit small businessese ...
and are experiencing immediat financial hardship,” the SBA The loans are for upto $35,000. They must be used to make paymentas on existing debt so the business can use its revenud to fund other operational expenses. Repayment can be deferred for up to12 months. It’sx part of the SBA’s expanded effort to help smalkl businesses navigatethrough short-term, recession-relatex distress. The program is scheduled to launchJune 15. But lendersd aren’t ready to commit to it. Area bankera are asking how they’re supposed to determine what qualifiese asa “viable” business that’ s experiencing “immediate financial hardship.
” And bankersd also say they still don’t know what interes t rates the ARC loans will carruy — a key piece of information in determining their level of “We’re studying it,” says John Guy, senior vice president of SBA strategiess at . “The timeline didn’tg quite accommodate all the lenderws that need the specific Guy notes Fifth Third has launched an effortg to boost its SBA And he says customers are alreadu asking the bank about theARC program. But he can’ t give them many answers until he learns what interesgt rate the SBA will pay onthe loans, alontg with other details. “We’re askingg people to be patient,” he says.
“The press is way ahead of the George McAllister, regional director of the , says he gets call on a regular basis from business ownerds interested in the “Based on what I know righ t now, I think it will be a very populae program,” he says. “It certainly fits a need.” At , Chiec Executive Scott Anderson says his teamof small-business bankersz recently attended an informational session on the ARC progranm but left unsure of key information. “Oud comments echo everyone else,” he “There’s not even a standard definitioof what’s a viable company.
” SBA spokeswoman Eileen Joycde says the viability question is a determination for lenderse to make at their discretion. Her agency is working as fast as possiblw to get other details to lenderws byJune 15. She says the ARC program is a challenge forSBA officials, too, because it’s the first of its She says Charlotte-area banks “are all in a wait-and-see on whether they’ll participate. “It’s a whole different way of puttinfg together aloan deal. That’s the hard Joyce says small-business owners are “verty anxious” about the program, hoping it will roll out in time to meet their growing needs.