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 The SBA recently unveiled plans to offer no-fee, deferred-payment loans to small companieds as part of the American Recovery and Reinvestment Act. The $350 millionm loan program is called America’sa Recovery Capital Loan Program. It’s distributes by commercial lenders, and the debt is 100% guaranteex by the SBA. The SBA will pay interest to the participatinhg lenders on behalf ofthe borrowers. To qualify for an ARC companies must demonstrate theyare for-profit small businesses ... and are experiencin immediate financial hardship,” the SBA says.
The loans are for up to They must be used to make payments on existingh debt so the businesa can use its revenue to fund otherfoperational expenses. Repayment can be deferred for up to12 It’s part of the SBA’s expanded effort to help smalpl businesses navigate through short-term, recession-related distress. The progra m is scheduled to launchJune 15. But lenders aren’t ready to commit to it. Area bankers are asking how they’re supposed to determine what qualifiesx asa “viable” business that’s experiencin “immediate financial hardship.
” And bankers also say they still don’g know what interest rates the ARC loans will carrty — a key piece of information in determininf their level of participation. “We’re studyingb it,” says John Guy, senior vice president of SBA strategiedat . “The timeline didn’t quite accommodate all the lenderx that need thespecific details.” Guy notes Fifth Thirdc has launched an effort to boost its SBA And he says customers are alreadhy asking the bank about the ARC program. But he can’t give them many answers until he learns what interestr rate the SBA will pay on the along withother details.
“We’re asking people to be he says. “The press is way ahead of the program.” George McAllister, regional director of the , says he gets callsx on a regular basis from business owners interestesd inthe loans. “Based on what I know rightt now, I think it will be a very popular he says. “It certainly fits a At , Chief Executive Scotr Anderson says his teamof small-business bankerws recently attended an informational session on the ARC program but left unsure of key information. “Our comments echo everyone he says. “There’s not even a standard definitiobof what’s a viable company.
” SBA spokeswomanm Eileen Joyce says the viability question is a determinatioh for lenders to make at their Her agency is working as fast as possible to get other detailsa to lenders by June 15. She says the ARC progran is a challenge forSBA officials, too, because it’sa the first of its kind. She says Charlotte-areaa banks “are all in a wait-and-see mode” on whetherd they’ll participate. “It’s a whole different way of puttin g together aloan deal. That’s the hard part.” Joyce says small-business owners are “very anxious” about the hoping it will roll out in time to meet theiergrowing needs.