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About the ARC Loan Program
ARC Loan Eligibility
Applying for an ARC Loan
Learn How SBA Can Help The American Recovery and Reinvestment Act will have a significant impact on
small businesses and on the credit crunch, providing tax incentives and
financing opportunities that will help them create jobs.
The American Recovery and Reinvestment Act makes SBA part of the solution,
providing it with specific tools to make it easier and less expensive for small
businesses to get loans, give lenders new incentives to make more small business
loans, and help unfreeze the secondary markets to boost liquidity in the credit
markets.
More details on implementation will be coming over the next few weeks.
The bill provides $730 million to SBA and makes changes to the agency's lending
and investment programs so that they can reach more small businesses that need
help. The funding includes:
- $375 million for temporarily eliminating fees on SBA-backed loans and
raising SBA's guarantee percentage on some loans to
- 90 percent. The elimination of fees, announced on March 16, will remain
in effect until the end of the calendar year or until the funding is
exhausted. The elimination of fees is retroactive to the day the Recovery
Act was signed into law.
- $255 million for a new loan program to help small businesses meet
existing debt payments
- $30 million for expanding SBA's Microloan program, enough to finance up
to $50 million in new lending and $24 million in technical assistance grants
to microlenders
- $20 million for technology systems to streamline SBA's lending and
oversight processes
- $15 million for expanding SBA's Surety Bond Guarantee program
- $25 million for staffing up to meet demands for new programs
- $10 million for the Office of Inspector General
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UPDATE: 60% of Lenders Still Say "NO" to ARC Loans
More comments and survey entries on the ARC loan program show similar results to those of last month. 60% of SBA lenders say they will not make ARC loans. There are lenders who have decided to make the loans but the industry consensus is to hold off. . . . keep reading
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SBA Emergency Loans to Start mid-June - Reuters
Calling it another "tool to our toolbox" SBA head Karen Mills said the new American Recovery Capital (ARC) program will offer "viable" small businesses temporary six-month loans of up to $35,000. "We expect these loans to be in high demand," said Mills, who made the announcement as part of her keynote address at the National Small Business Week conference. . . . keep reading
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Comments on SBA ARC Loan Program
SBA's America's Recovery Capital Loan Program can provide up to $35,000 in short-term relief for viable small businesses facing immediate financial hardship to help ride out the current uncertain economic times and return to profitability. Each small business is limited to one ARC loan. Starting June 15, 2009 ARC loans will be offered by some SBA lenders for as long as funding is available or until September 30, 2010, whichever comes first. Comments from SBA lenders have been posted. Send more comments to bob@colemanpublishing.com . . . keep reading
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SBA Adm. Mills Annnounces ARC Program (Begins June 15, 2009)
WASHINGTON -- Small businesses suffering financial hardship as a result of the slow economy may be eligible to receive temporary relief to keep their doors open and get their cash flow back on track through to a new loan program announced today by SBA Administrator Karen G. Mills. Beginning on June 15, SBA will start guaranteeing America's Recovery Capital (ARC) loans. ARC loans are deferred-payment loans of up to $35,000 available to established, viable, for-profit small businesses that need short-term help to make their principal and interest payments on existing qualifying debt. ARC loans are interest-free to the borrower, 100 percent guaranteed by the SBA, and have no SBA fees associated with them. . . . keep reading
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SBA Loan Programs Getting Back on Track, Mills Says - WSJ
Excerpt: "Ms. Mills says more specific information about a potentially critical loan program called America's Recovery Capital will be released next week during National Small Business Week. That program is designed to help struggling small businesses with a loan of up to $35,000.
The main reason? Ms. Mills says some 1,200 lenders are returning to these SBA loan programs; some are also participating for the first time. It's a good sign, since more than 360 lenders had not made an SBA-backed loan since October (almost half of these lenders had not made a loan since two years ago.) . . . keep reading
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Message Therapist Discusses Her SBA Loan Process
"Obtaining our SBA loan was a full-time job in itself," Jennifer recalled. "I'm very organized, so I had everything at my fingertips. The trouble is, you submit something, a month goes by, you wait, and then you have to resubmit everything again." Despite Massage Envy's excellent national reputation for providing guests a clean, safe and professional environment, Jennifer also had to contend with city rules precluding a massage-only business that did not offer complementary services, such as facials or other spa treatments. Fortunately, Massage Envy also had contracted with Murad, Inc., the best-selling clinical skincare brand in leading salon and spa locations worldwide, so clearing this other hurdle was just one more business challenge she was prepared to overcome. . . . keep reading
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Nationwide Stroller Strides Franchise Started With "Mompreneur" and an SBA Loan
We grew organically. What I mean by that is that we spent only what we had to. Any time we made money, we re-invested it back in to the company. We have tapped in to our home line of credit and credit cards when we've had to at various times in the business. Not sure that I would recommend that. We got one small SBA loan during later years in the business. . . . keep reading
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Small Businesses Await $35,000 Loans
When the Small Business Administration pitches its $35,000 loan later this month to firms seeking "temporary financial relief to keep their doors open," it may be the salvation of small companies seeking short-term survival cash. But experts said $35,000 isn't much money, especially in a high-cost place like New Jersey, and these loans are likely to be limited to companies that might survive the recession. "It sounds like a good program," said Stephen Guidette, senior vice president of business banking for Jersey City-based Provident Bank. He said these small loans seem geared to "the small mom-and-pop or professional-services businesses. It's another brick in the wall to build back the economy." . . . keep reading
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SBA Fails to Meet Congress' Deadline for Stimulus Programs - GAO Report
The GAO has issued a report listing the programs SBA has failed to meet Congress' deadline.
The key provisions SBA has not yet met.
Establishment of SBA Secondary Market Broker Dealer Loan Program -- due March 19
Establishment of the new $35,000 ARC loan program -- due March 4
Establishment of SBA 504 Secondary Market Program -- due March 4
. . . keep reading
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House Small Business Committee Urges SBA Administrator Mills to Promote Business Stabilization Loan Program ($35,000 Loans)
The chairman of the House Committee on Small Business yesterday urged the new head of the Small Business Administration to try to jump-start lending by using provisions in the economic stimulus bill that so far have sat idle. "With every day that goes by, viable small businesses are being forced to close," Rep. Nydia M. Velázquez (D-N.Y.) wrote in a letter to SBA Administrator Karen Gordon Mills, who was confirmed last week. "Without the lifeline that this program can provide to small businesses, our economic recovery will be slowed." . . . keep reading
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Wednesday, March 25, 10:30 AM EDT Live Blog of The Hearing on Senate Small Business Administration Committee....
M. Landrieu - We would like to reach out to all banks, those who haven't participated in SBA loans and those who have, to take advantage of the 90% guaranty rate and $35,000 bridge loan to make SBA loans.
J. Snowe - It's paramount that small business and potential small business owners get access to all the help they can get, and right now, they're not getting that help, the value of our help hasn't been maximized. I would hope that the SBA is planning on hiring more individuals to maximize value and achieve the best possible results.
Acting Administrator - We recognize the urgency of this situation, and will get you more information just as soon as we possibly can; it simply hasn't come out yet.
M. Landrieu - The last thing we want to do is throw money at programs that aren't working successfully or we don't anticipate will be successful, we can't waste a single dollar in today's day and age.
J. Snowe - I think it's essential to secure allocations for SBA lending as soon as possible.
Watch the Hearing after the jump..... . . . keep reading
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Transcript of SBA's web chat, "The Recovery Act and Your Small Business", hosted by Eric Zarnikow
Question : We have read quite a bit about $35k SBA loans to be available to small businesses but when will they become available? I keep asking my bank and they say to ask you.
Reply : Thank you for your question Janine. SBA is working as quickly as possible to implement this program; however it is a brand new program that needs to be built from scratch, including developing policy and modifying computer systems, so it will take a bit longer. Specific program details are being worked on as we speak. ARC Business Stabilization Loans are 100% guaranteed deferred payment loans of up to $35,000 to help VIABLE small businesses facing immediate economic hardship make payments on existing qualifying loans.
Question : Can the $35,000 ARC funds be used for any purpose, including working capital or will there be restrictions on what the money can be used for.
keep reading
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7(a) Borrowers May Be Ineligible for $35,000 Stimulus Loans
"Folks, I spoke with the Administrator of the SBA this morning. We both pulled up Thomas and reviewed the final language in HR1 as it relates to ARC. Lo and behold the reference I questioned in the SBA's memo is shockingly correct per SBA's interpretation." - Eddie Tuvin, Managing Director of Creative Capital Associates . . . keep reading
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The President and the Congress Miss Target with the ARC Stabilization Loan Program
This was the program designed to provide 100% guaranteed deferred loans up to $35,000 to small businesses facing immediate economic hardship. So, if you have an existing SBA loan prior to February 17, 2009 -- YOU DON"T QUALIFY!!! Why would Congress pass and the President sign into Law a program that misses well over 100,000 SBA Loan recipients over the past 10 years? Was this an oversight or was this intentional? One of the hardest hit groups in this economic crisis is most likely the Small Business who is an SBA borrower. What lender was lending to businesses with no collateral or start-ups other than SBA lenders? So who does this help -- the conventional borrower who cannot make their current payments? Let us not forget that many of those loans were made with sufficient collateral backstopping those loans unlike the SBA borrower who purchased a new business or an individual who bought into a franchise concept that was retail or service based. . . . keep reading
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Changes in SBA Loan Regulations Coming Soon Says NJ District Director
Through the end of 2010, the agency also will waive the guarantee fee, which is charged to the lender but passed on to the borrower, Jim Kocsi, New Jersey SBA district director, said. In effect, the fee reduces the amount of money the borrower can use, since part of the loan goes to pay the fee. "To give you an idea of the impact -- on a $2 million loan, the fee is $53,000," he said. A new program also is being created to provide a 100 percent guarantee of up to $35,000 in "debt stabilization" loans to help small businesses that are in arrears, Kocsi said. And a key change is being made to the SBA's 504 program, which makes larger loans are secured by fixed assets, such as real estate or machinery. In the past, these loans could not be used to refinance existing debt; the change will permit a 504 loan for refinancing. . . . keep reading
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