Help for Small Businesses Facing Financial Hardships
As part of the American Recovery and Reinvestment Act of 2009, SBA has designed The America's Recovery Capital, or ARC Loan Program to help small businesses make payments on existing debt. This program was created to allow small businesses temporary financial relief so that they can redirect their cash flow to investing in their business, thereby, helping build & retain community businesses, create jobs and stimulate the economy. Here are some highlights of the program:
Loan Structure
ARC Loan will be used to make up to 6 months of loan payments on qualifying loans for existing small businesses
Repayment of the ARC Loan is deferred 12 months after the last disbursement of proceeds
Repayment period for ARC Loan is five years
ARC Loans are interest free to the borrower. SBA pays the monthly interest to the bank
ARC Loans are 100% guaranteed by SBA to the lender
Loan Eligibility
Must be an established business that can show a profit in one of the past two years
Must be able to project sufficient cash flow to meet current and future loan payments over a period of two years from loan approval
Qualifying Loans include credit card obligations from your business, capital leases, notes payable to vendors/suppliers, and other business loans
Payments must be current for existing loans
For more information, contact your lender to determine if you are a candidate for the ARC loan or read more about the program here http://www.sba.gov/recovery/arcloanprogram/index.html
Improvements to Existing SBA Loan Programs
Including the ARC Loan Program, the Recovery Act provided $730 million to SBA for the purpose of offering new economic incentives to small businesses and lenders alike, aimed at growing our economy through job creation, re-starting lending, and investing in small businesses. So now may be the time to consider an SBA loan through your local bank. Here are some key features of this bill that benefits small business owners:
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The temporary elimination of upfront borrower loan fees makes SBA loans morea affordable for small businesses. The fee elimination means more capital available to businesses at a lower cost.
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Banks will begin investing in small businesses again, making credit more readily available.
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Streamlined applications and fast turnaround by SBA.
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The SBA will temporarily guarantee up to 90% on SBA 7(a) loans which reduces the risk lenders face so that banks feel more comfortable lending to small business owners.
For more information about the programs offered by the SBA under the Recovery Act, visit www.sba.gov/recovery.