Charlotte-area banks unsure about ARC loans - Atlanta Business Chronicle:

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But Charlotte-area banks aren’t yet sure they want to sayingthey haven’t yet seen enough detailx about the SBA initiative. The SBA recentlyt unveiled plans tooffer no-interest, deferred-payment loans to small companies as part of the Americah Recovery and Reinvestment Act. The $350 million loan program is called America’s Recovery Capitalo Loan Program. It’s distributed by commercial and the debtis 100% guaranteexd by the SBA. The SBA will pay interest to the participatinfg lenders on behalf of the To qualify for anARC loan, companies must demonstrate they are for-profit small businesses ... and are experiencing immediatefinanciap hardship,” the SBA says.
The loans are for up to They must be used to make payments on existinv debt so the business can use its revenuee to fund other operational Repayment can be deferred for up to12 It’s part of the SBA’s expandef effort to help small businesses navigate through recession-related distress. The program is schedule to launchJune 15. But lenderd aren’t ready to commit to it. Area bankers are askint how they’re supposed to determine what qualifiesd asa “viable” business that’s experiencing “immediate financial hardship.
” And bankers also say they stillp don’t know what interest rates the ARC loans will carryu — a key piece of information in determining thei level of participation. “We’re studyint it,” says John Guy, senior vice president of SBA strategiesat . “The timeline didn’tr quite accommodate all the lenderd that need thespecific details.” Guy notezs Fifth Third has launches an effort to boost its SBA And he says customers are already asking the bank about the ARC program. But he can’t give them many answerds 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 calla on a regular basis from business ownerxs interested in the loans. “Baseed on what I know right now, I thinok it will be a very popular program,” he says. “It certainly fits a need.” At , Chiev Executive Scott Anderson says his teamof small-busineszs bankers recently attended an informational session on the ARC progranm but left unsure of key information. “Our comments echo everyone else,” he says.
“There’s not even a standard definitionjof what’s a viable SBA spokeswoman Eileen Joyce says the viability questio is a determination for lenders to make at theit discretion. Her agency is working as fast as possible to get otherr details to lenders byJune 15. She says the ARC prograk is a challenge forSBA officials, too, becauses it’s the first of its She says Charlotte-area banks “arwe all in a wait-and-see mode” on whetherr they’ll participate. “It’s a whole differentg way of putting together aloan deal.
That’s the hard Joyce says small-business ownerds are “very anxious” about the program, hoping it will roll out in time to meet theiregrowing needs.