A new Small Business Administration loan program is off to a rocky start, said James Kocsi, the New Jersey district director for the federal agency.
“So far, New Jersey’s largest SBA lender, TD Bank, declined to participate in the America’s Recovery Capital, or ARC, loan program,” Kocsi said. “And six other banks told us they’ll participate, but would only offer the program to existing borrowers.”
TD Bank did not return a phone call to its Cherry Hill office seeking comment.
ARC, introduced June 15, offers interest-free loans of up to $35,000 to small businesses that need short-term help to make principal and interest payments on existing business debt. ARC loans are fully guaranteed by SBA, and have no SBA fees associated with them, according to Kocsi, who said SBA will pay the interest on ARC loans to lenders at the variable rate of prime plus 2 percent.
He said some banks have cited the relatively low amount of ARC coverage as an impediment to participating in the program.
“They may be concerned about the level of administrative work involved in handling a relatively small, $35,000 loan,” Kocsi said. “But this is a great way for banks to take care of their small-business customers, who will remember the help they got as they grow larger.”
In an information session earlier in the month, Kocsi introduced the details of the program to a room full of business owners who wanted information about ARC.
For more information - http://businessborrowersalliance.org/35000ARCLoanNews.html
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