Small Business Loans: SBA ARC Loans

This is from the SBA. If the new owner is struggling with making payments debt, he might be eligible for an ARC Loan.

Lenders Can Help America’s Small Businesses Recover with SBA’s ARC Loans

By: US Small Business Administration

Lenders play a critical role in the health of the American economy, and are especially vital to small businesses. The U.S. Small Business Administration is implementing a special, temporary loan program you can use to help struggling American small businesses while reducing your risk during these tough economic conditions.

Under authority provided in the American Recovery and Reinvestment Act (signed Feb. 17, 2009), SBA has designed a deferred-payment loan program to help small businesses make payments on existing debt.

Section 506 of the Recovery Act authorized SBA to help viable small businesses make payments on existing small business debt. The America’s Recovery Capital, or ARC Loan Program, is designed to give viable small businesses facing immediate financial hardship some temporary financial relief so they can keep their doors open, refocus and get their cash flow back on track. ARC loans are available through SBA-approved small business lenders and have been authorized through Sept. 30, 2010, or until the appropriated funds run out, whichever comes first.

Non-SBA lenders can become ARC lenders. Contact your local SBA district office for information and training. You can find the nearest SBA district office at www.sba.gov/localresources/index.html.

Loan structure

• An ARC loan is a deferred-payment loan of up to $35,000.
• ARC loans will be used to make up to six months of principal and interest payments on qualifying loans for existing viable for-profit small businesses in the United States.
• Disbursement period (up to six months) is followed by 12 months with no repayment of the ARC loan principal, followed by a repayment period of five years. SBA pays monthly interest to the bank.

How lenders benefit

• Reduced Risk: 100 percent guaranty provides greater security and confidence to lend.
• Guaranteed Interest: SBA will pay monthly interest to the lender at reasonable rates throughout the term of the loan. 
• Conventional, commercial business loans (and SBA-guaranteed loans made on or after Feb. 17, 2009) are an eligible use for ARC loan proceeds.
• Proceeds may be used to pay on mortgages, secured and unsecured loans, lines of credit and credit cards if the debt was used for eligible business purposes under the program. 
• SBA turnaround on non-delegated loan applications – expected within five to ten business days.
• Access to E-Tran, SBA’s electronic application process available to SBA delegated lenders.
• Existing SBA lenders are eligible to make ARC loans and delegated lenders may make ARC loans on a delegated basis.

How the community benefits

• SBA loans help build and retain community businesses, create jobs and stimulate economic activity.

How small business owners benefit

• ARC loans are interest-free to the borrower, have deferred payments for 12 months, and have no SBA fees associated with them.
• ARC loans will allow borrowers to redirect cash flow from making loan payments to investing in their businesses.
• Banks will begin investing in small businesses again, making credit more readily available for those businesses that need it.
• Streamlined applications by SBA.

SBA loan programs now provide greater incentives to you the lender, are more affordable for small business owners, and help to drive economic recovery in your community.

For more information, click on www.sba.gov/recovery.

All SBA programs and services are provided on a nondiscriminatory basis.
U.S. Small Business Administration • Recovery Act: Lenders Can Help Small Business with ARC Loans • 2

Comments

[ultrayellowpages]

This is the first truly new loan program with the SBA for almost two decades. Before we get carried away with too much a emotional contagion, let's roll up our sleeves and take a look at the basic elements of this new creature.

Saratoga springs

[janie]

40billion.com is a good option for business owners seeking financing and resources. Small businesses and startup entrepreneurs raise money through personal connections online (a.k.a person to person, peer to peer, social lending). This elevates access to funding, increases transparency, reduces costs, and lowers risk.

Entrepreneurs connect with their social networks (friends, family, friends of family, community members, colleagues, alumni and others) to raise up to $99,000 in capital by requesting loans and gift contributions. Funders can get product discounts and freebies, as well as the ability to track how the funding is spent.

Visit http://www.40billion.com for more info about people funding businesses.

[ultrayellowpages]

The lending community, the SBA, and many small business owners, are all "abuzz" about the new U.S. Small Business Administration ARC Loans. For the esoteric among us, this is an acronym for "America's Recovery Capital " Program. And they should be. This is the first truly new loan program with the SBA for almost two decades. Before we get carried away with too much a emotional contagion, let's roll up our sleeves and take a look at the basic elements of this new creature.

bill shor

[jonathan]

Sounds great with competitive rate. Be careful of choosing a loan company. There may be some hidden costs you don't realize until it's time to pay.

[sara]

I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

Sara

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[Neal Gordon]

The SBA ARC Loan program continues to be problematic for many struggling small businesses. The loan amount is too small to help many businesses (Ask Congress why they thought this would be enough). The amount of documentation is nearly the same as is needed for a $1million loan. And the biggest issue that borrowers are facing is finding a lender who will loan to them, which is based on the type of qualifying debt that applicant has. So even if a business is qualified, it is far from automatic that they get a loan. As the article intimates, banks are wary and the debt they “prefer” are the term loans, notes and capital equipment leases, because the borrower can’t draw back on them once the ARC Loan pays off that debt.

My company, Business Borrowers Alliance, is contacting the large and mid-sized banks to learn if they are participating and what their specific requirements are. We provide direct assistance and help to businesses throughout the complete ARC Loan application process.

For more information, contact us at 866-944-3866 or mail@businessborrowersalliance.org

Neal Gordon
http://www.businessborrowersalliance.org

[business credit cards]

If you have a great idea, great people to work with, a well written business plan – everything, almost everything. All you need is a small business loan to make it a success!!!

[Unsecured Small Business Loans]

Unsecured type of loan is in real not secured by any valuable property. Here in this type of loan the lender only give the amount of money to the borrower on the basis of the promise which the borrower has made.

[AceCashExpress]

"ARC loans are interest-free to the borrower, have deferred payments for 12 months, and have no SBA fees associated with them." Then it's a really good program. Win-win solutions to all and jobs will flourish again around the business' location.

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Ace Cash Express
http://acecashexpress.com/

[regionmap]

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[Small Business Loans]

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[Alena]

I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

Alena

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