Tick Tock– Time Running Out for SBA’s America’s Recovery Capital Loan

U.S. Small Business Administration’s ARC Loans…The End is Near!

 Have your customers still NOT gotten the memo that the economy is supposed to have picked up AND they should be spending money at your business?  Are you still struggling to keep your doors open juggling operating expenses with existing business debt?  In that case you should look into the U.S. Small Business Administration’s America’s Recovery Capital (ARC) loan program…BUT Tick Tock time is running out!

 The ARC (America’s Recovery Capital) loan program is set to expire with the end of SBA’s fiscal year, September 30, 2010.  According to our sources, money should still be available through September 30^th.  However, the ARC would need to have been approved and assigned a loan number on or before September 30^th to be considered eligible for the program.

 For those of you unfamiliar with the program (or who have forgotten about it), the ARC was “intended to give existing, viable small business that are suffering immediate financial hardship some temporary financial relief so they can keep their doors open and get their cash flow back on track, retain existing jobs, and ultimately grow in the future.”  The ARC is:

•  A deferred-payment loan of up to $35,000 to be used for principal and interest payments on existing, qualifying debt/loans. 
• Lenders receive a 100% guaranty from the SBA
• The SBA does not require the lender (in fact discourages) to attach collateral assets
• Repayment of the 100% guaranteed loan is deferred for 12 months and
•  is re-paid over a five year period. 
• the Small Business borrower pays Principal only, interest is paid to the lender by the SBA.

Laura Miller, Lead Consultant ASU SBTDC

 Businesses that need financing assistance but do not qualify for the ARC can be considered for the SBA’s traditional 7(a) loan program.  For more information about the ARC and all SBA loan programs, visit the SBA web site at www.sba.gov or contact Laura Miller or Robert Bahn at the ASU SBTDC.  Our consultants at the ASU SBTDC developed a pre-loan check list and guide that shows the small business the documentation they need to complete or attach as well as detailed guidelines to eligibility.  If you would like to have one of these ARC Pre loan Application Packets e-mailed to you contact the ASU SBTDC at (870) 972-3517 or e-mail us at asusbtdc@astate.edu.  At the present time our sources at the SBA are unsure whether or not the program will be renewed for the fiscal year beginning 1 October so if you believe your small business could benefit from the ARC program you need to begin the process TODAY!

As of August 13, 2010 over 8,000 ARC loans had been approved for small businesses across the country.

By Laura Miller, Lead Consultant, Arkansas State University Small Business and Technology Development Center

Tagged as: America's Recovery Capital loan program, ARC loan program, business loans, commercial loans, government guaranty loans, government loans, Obama loans, SBA, Small Business loans, U.S. Small Business Administration