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

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The SBA had expected high demand forthe loans, whicgh were created by the economic stimulus legislation to help strugglinyg small businesses make payments on existin debt. Through this program, smalk businesses can borrow upto $35,00p to make up to six months of payments on qualifying loans. Borrowers won’tr have to start repaying the ARC loanzs until a year after they receive their last ARC loan The loansare interest-free to the borrower. the SBA will pay the lender a monthlyu interest rate of prime plus 2percentagwe points. The SBA also will guaranter 100 percent ofthe loan’s The SBA began accepting applicationxs for these loans June 15.
As of June 22, the agencg had approved 72 loanstotaling $2.4 millio n submitted by 42 lenders. Small businesses in 21 states receivedthese loans. The agency expects the volumwe of ARC loans to pick up incoming weeks. The agenc y has conducted training sessions on the loanswith 3,0000 lenders from 1,300 financial institutions. “Basecd on the participation in the information we are encouraged and feelwe will, in continue to see a rise in participatioj by lenders and the number of loan said SBA Press Secretary Hayley Matz.
Many SBA lenders, remain on the The Coleman Report, which tracks SBA found that 60 percent of the lenders who respondee to its survey saidthey don’t plan to make ARC Some lenders said they wouldn’t make enough money off the loans to justify the trouble, and others said the SBA’s guidelines for the loans were too vague. To be eligible for the loans, small businesses must show they were profitable or had positive cash flow in at least one of the past two Future cash flow projections must demonstratd that the businesses will be able to repagytheir debts, including the ARC loan.
The has submitted four pagesx of questions to the SBA aboutthe “Our members have many questions aboutg the program, and that is probably why the volum e is less than anticipated,” said NAGGoL President Tony Wilkinson. lending through the SBA’s regular busines s loan programs remains far belowslast year’s levels. Through June 19, the SBA had approvec half as many 7(a) loans this fiscal year as it did duriny the same period ayear ago. The totall dollar value of 7(a) loands was down 38 percent. Lending through the 504 which finances real estate and otherdfixed assets, was down 42 both in number of loans and in SBA’s fiscal year began Oct. 1.
Lending through both programs picked up afterMarch 16, when the SBA eliminated or reduced fees on its loansx and raised its guarantee on 7(a) loans to 90 percent. Thes e steps were called for in the the economifstimulus legislation.