Few take out SBA stimulus loans, many lenders lukewarm - Atlanta Business Chronicle:

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The SBA had expected high demand forthe loans, which were createsd by the economic stimulus legislation to help strugglinv small businesses make paymenta on existing debt. Through this program, smallp businesses can borrow upto $35,000 to make up to six monthz of payments on qualifying loans. Borrowerz won’t have to start repaying the ARC loansd until a year after they receives their last ARCloan disbursement. The loanws are interest-free to the Instead, the SBA will pay the lender a monthlt interest rate of prime plus 2percentagse points. The SBA also will guarantee 100 percent ofthe loan’s The SBA began acceptinfg applications for these loans June 15.
As of June 22, the agencg had approved 72 loanstotaling $2.4 million submitted by 42 Small businesses in 21 states receivedc these loans. The agency expects the volumes of ARC loans to pick up incomingf weeks. The agency has conducted training sessions on the loandwith 3,000 lenders from 1,300 financial institutions. “Based on the participation in theinformation sessions, we are encouraged and feel we will, in continue to see a rise in participatiobn by lenders and the numberf of loan approvals,” said SBA Presas Secretary Hayley Matz.
Many SBA however, remain on the The Coleman Report, which tracks SBA lending, founfd that 60 percent of the lenders who respondedx to its survey saidthey don’t plan to make ARC Some lenders said they wouldn’t make enougyh money off the loan s to justify the trouble, and others said the SBA’se guidelines for the loans were too To be eligible for the loans, smalkl businesses must show they were profitable or had positive cash flow in at least one of the past two years. Future cash flow projections must demonstratd that the businesses will be able to repaytheif debts, including the ARC loan.
The has submittedd four pages of questions to the SBA aboutthe “Our members have many questions aboutt the program, and that is probably why the volume is less than said NAGGL President Tony Wilkinson. Meanwhile, lending throughh the SBA’s regular business loan programs remains far belowlast year’se levels. Through June 19, the SBA had approvecd half asmany 7(a) loans this fiscal year as it did duringv the same period a year ago. The total dollar value of 7(a) loans was down 38 percent. Lendinh through the 504 program, whicyh finances real estate and otherfixed assets, was down 42 both in number of loans and in dollars. SBA’ds fiscal year began Oct. 1.
Lendinyg through both programs picked up afterMarch 16, when the SBA eliminates or reduced fees on its loanx and raised its guarantes on 7(a) loans to 90 These steps were called for in the the economixc stimulus legislation.