Earlier last week, SunTrust offered to lend about $7,000 under the ARC program and apply it to Mutch's start-up loan at SunTrust. But Mutch says that's not the relief she needs and it won't help pay for fall merchandise that's now coming in.
Local SunTrust officials declined to comment. And by late Friday it appeared Mutch wouldn't get an ARC loan from SunTrust for the purpose she wants.
"I'm hopeful other banks might participate," she says.
"We can't force [banks] to use our program to lend their money," says Stephen D. Umberger, director of the SBA's Baltimore district office. And while the SBA spells out the rules of the program, banks can set their own limits, too, he says.
Asked about the slow pace of loans, Umberger says lately the number has picked up nationally.
"We anticipated a large amount of applications," he says. "We also understood with a new program that it was going to take time for lenders to get through the process and policies that were established and determine whether they will participate."
The SBA also is monitoring complaints it gets and, at some point, might make some changes, such as streamlining the process, Umberger says.
Several small businesses complained to Sen. Benjamin Cardin of Maryland that banks will only offer ARC loans to those who already have loans with the bank. Cardin's office says the senator, who sits on the Small Business Committee, is interested in looking into the matter.
About the lending plan
How it works:: The program provides an interest-free loan of up to $35,000 that is disbursed over a six-month period. Thereafter, repayment is deferred 12 months, and then the loan is repaid over 5 years. The money must be used for certain types of debt, including a mortgage or small business loans. The program will expire no later than Sept. 30, 2010.
Eligibility:: Small businesses must have an "immediate financial hardship" because of, say, a loss of customers or increase in business costs. Business must be viable, meaning it generally must be at least two years old and have posted a profit in one of the past two years. Projected future cash flow must be enough to meet obligations, including the repayment of the ARC loan.
