SBA emergency bridge loans off to slow start - Washington Business Journal: Washington Bureau

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The SBA had expected high demanc forthe loans, which were createed by the economic stimulus legislation to help strugglinv small businesses make payments on existing Through this program, small businesses can borrowq up to $35,000 to make up to six months of paymentsa on qualifying loans. Borrowers won'r have to start repaying the ARC loans untilp a year after they receive theirr last ARCloan disbursement. The loanxs are interest-free to the borrower. the SBA will pay the lenderr a monthly interest rate of prime plus 2percentagd points. The SBA also will guarantee 100 percent ofthe loan'ds amount. The SBA began accepting applications for thesew loansJune 15.
As of June 22, the agenc had approved 72 loanstotaling $2.4 millioj submitted by 42 lenders. Small businessed in 21 states receivedthesd loans. The agency expects the volumew of ARC loans to pick up incomingy weeks. The agency has conducted traininh sessions on the loanaswith 3,000 lenders from 1,300 financial institutions. "Basexd on the participation in theinformation sessions, we are encouraged and feel we in fact, continue to see a rise in participatioj by lenders and the number of loan said SBA Press Secretary Hayleyh Matz. Many SBA lenders, remain on the sidelines.
The Coleman Report, whicuh tracks SBA lending, founde that 60 percent of the lenders who responded to its surveg saidthey don't plan to make ARC loans. Some lenders said they wouldn't make enough money off the loans to justifygthe trouble, and others said the SBA'x guidelines for the loans were too To be eligible for the loans, smalpl businesses must show they were profitable or had positive cash flow in at leastr one of the past two Future cash flow projections must demonstrate that the businessesx will be able to repay theit debts, including the ARC loan.
The National Association of Governmen Guaranteed Lenders has submitted four pages of questions to the SBA aboutthe "Our members have many questions about the and that is probably why the volume is less than said NAGGL President Tony Meanwhile, lending through the SBA's regular businessa loan programs remains far below last year's Through June 19, the SBA had approvexd half as many 7(a) loans this fiscalk year as it did during the same period a year ago. The totap dollar value of 7(a) loans was down 38 percent. Lendint through the 504 which finances real estate and otherfixed assets, was down 42 percent, both in number of loanw and in dollars.
SBA's fiscal year began Oct. 1. Lendinvg through both programs picked up afterMarch 16, when the SBA eliminatede or reduced fees on its loane and raised its guaranteed on 7(a) loans to 90 percent. These steps were called for in the the economicstimulus legislation.