Tennessee lenders so far steering clear of ARC loan program for small businesses - bizjournals:

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As of July 6, 251 loans were funde with a valueof $8.29 but none in Tennessee, says David public information officer for SBA’s Tennessee “At this point I don’t know of in Tennessee, he says. “Banks are in a trainintg phase; they have a learning curve.” Loans have so far been done in 35 statezs by 121 lenders for 151different industries, Tiller says. More than 3,00o individuals from 1,300 institutions participated in the ARC informatiohn andtraining session, Tiller says. The program is scheduled to end Sept.
30 or when the allocateds $350 million runs out, whichever comes But the fact that no businesses in muchless Memphis, have applied is worrisome to some busineszs advocates. “I hate to see an area like the Mid-Soutnh that needs an economic boosf miss out on something because it got bungle d in implementation or for whateveer reason banks decided not todo it,” says business and estat e planning attorney John Windsof Jr. with Windsor Law Firm PLC. Windsor contacted more than a half dozeh banks for clients to see if lenderxs were underwritingARC loans.
Conversations with two lendersx revealed concerns about guaranteeing the loans and confusion with some of the terms spelled out in the one being an understanding ofa “viable business.” The SBA definesd a viable business as “onew that has been profitable in the past but is just beginninv to struggle with making loan payments, and can reasonably project that it can get back on traco with the infusion of ARC loan funds and the benefif of deferred payments.” Some bankers believew the legislation is too ambiguous and the risk too great. “The thrust was they just don’ t know what they can and can’t Windsor says. Anthony president and CEO of the Okla.
-based , says the program has receivedd a very lukewarm receptionb fromhis members. The association recently sent a six-page letterd to the SBA with 40 questionz directlyfrom members, Wilkinson says. Lenders were concernef with mainly technical issues such as how to file how fast they will get paid and referencesto 7(a) loan requirementd even though ARC is not a 7(a) “Some lenders are taking the view it’e a lot of work for a $35,000 loan,” Wilkinson says.