SBA ARC Loans: Hints on Which Banks May Play

Jeff Ostrowski , a writer for the Palm Beach Post has some new information on possible bank participation in the SBA ARC Loan program.
Bailout plan offers small businesses up to $35,000
After spending billions to bail out banks, taxpayers are poised to offer a much smaller amount for loans to struggling small businesses.

Starting Monday, employers can apply for loans of up to $35,000 through the Small Business Administration’s America’s Recovery Capital program. The terms are generous: No payments for the first year, and no interest for five years after that.
Not everyone will qualify. To land one of the emergency loans, a small business must be in trouble – but not too much trouble.

Borrowers must face “immediate financial hardship,” SBA says, meaning that their sales are falling or they can’t pay employees or lenders. But borrowers also must be “viable,” defined as positive cash flow for at least one of the past two years.
Borrowers can’t be more than 60 days behind on any loan, must have “an acceptable business credit score” and must present a convincing plan for surviving the recession.
“You’ve got to show us what you’re going to do,” said Tom Gallman, an SBA manager in Fort Pierce.
Gallman spoke to 25 small business owners Wednesday at a seminar in Wellington organized by the Palms West Chamber of Commerce.
Lenders said they’re still waiting for details from the SBA about the program, but they predict a flood of interest from borrowers.
“I’m assuming everybody in the room is going to at least ask the question,” said Jaene Miranda, chief executive of the Palms West Chamber of Commerce.
Lenders from Wachovia, SunTrust, TD Bank, Washington Mutual and National City said they’ll make loans through the SBA program. However, all said they’ll offer the loans only to businesses that already have accounts with them.
The SBA has $250 million for the America’s Recovery Capital loans. It expects to make about 10,000 loans nationwide.
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