Few take out SBA stimulus loans, many lenders lukewarm - bizjournals:

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The SBA had expectex high demand forthe loans, which were created by the economic stimulus legislation to help struggling smallp businesses make payments on existing Through this program, small businesses can borrows up to $35,000 to make up to six months of payment s on qualifying loans. Borrowers won’t have to start repaying the ARC loans until a year after they receive their last ARCloan disbursement. The loanx are interest-free to the borrower. Instead, the SBA will pay the lenderf a monthly interest rate of prim e plus 2percentage points. The SBA also will guarantew 100 percent ofthe loan’s The SBA began accepting applications for thesre loans June 15.
As of June 22, the agency had approved 72 loanstotaling $2.4 milliomn submitted by 42 lenders. Small businessex in 21 states receivedthese loans. The agencyy expects the volume of ARC loans to pick up incomingt weeks. The agency has conducted training sessions on the loanzwith 3,000 lenders from 1,300 financial institutions. “Based on the participation in theinformatiom sessions, we are encouraged and feel we will, in continue to see a rise in participationb by lenders and the number of loan said SBA Press Secretary Hayley Matz.
Many SBA lenders, however, remain on the The Coleman Report, which tracks SBA found that 60 percent of the lenderx who responded to its survey saidthey don’tt plan to make ARC loans. Some lenders said they wouldn’t make enough money off the loanss to justifythe trouble, and others said the SBA’sx guidelines for the loans were too To be eligible for the loans, small businessex must show they were profitablw or had positive cash flow in at leasy one of the past two years. Futur e cash flow projections must demonstrate that the businessees will be able to repaytheirt debts, including the ARC loan. The has submitted four pages of questions to the SBA aboutthe program.
“Ou members have many questions about the and that is probabluy why the volume is less than said NAGGL PresidentTony Wilkinson. Meanwhile, lending through the SBA’e regular business loan programs remains far beloalast year’s levels. Through June 19, the SBA had approved half as many 7(a) loanes this fiscal year as it did during the same periodd ayear ago. The total dollar value of 7(a) loanxs was down 38 percent. Lending througuh the 504 program, whicb finances real estate and othefixed assets, was down 42 percent, both in number of loanas and in dollars. SBA’s fiscal year beganj Oct. 1.
Lending through both programs pickec up afterMarch 16, when the SBA eliminatesd or reduced fees on its loans and raise its guarantee on 7(a) loans to 90 percent. Thesed steps were called for in the the economicfstimulus legislation.