The ARC loan is harder to get than it should be and serving a much narrower part of the small business community than intended, but if you can get one, it can be a great help to your business. Don’t take no for an answer – get creative!
What Banks are Making these Loans?
For a PDF list of banks in your state offering the SBA ARC loan go to: sba.gov – scroll half way down this page and click on: “List of lenders who have made ARC loans to date”
What is the ARC Loan?
Best explanation of the ARC loan itself that I’ve found on the internet is here at the Business Borrowers Alliance.
Contact Neal Gordon for more info – Just one page of their info is reproduced here:
From Business Borrowers Alliance Website:
About the ARC Loan Program
ARC loans can be used to make payments of principal and interest, in full or in part, on one or more existing, qualifying small business loans for up to six months. ARC loans provide an immediate infusion of capital to small businesses to assist with making payments of principal and interest on existing debt. These loans allow borrowers to redirect cash flow from making loan payments to investing in their businesses, to help sustain the business and retain jobs. For example, making loan payments on existing loans with proceeds from an ARC loan can allow a business to focus more funds on core operations, such as buying inventory or making payroll.
ARC loans are interest-free to the borrower, carry a 100 percent guaranty from the SBA to the lender, and require no fees paid to SBA. Loan proceeds are provided over a six-month period and repayment of the ARC loan principal is deferred for 12 months after the last disbursement of the proceeds. Repayment can extend up to five years.
ARC Loan Eligibility
ARC loans are available to viable, for-profit small businesses in the U.S. that have qualifying small business loans and are experiencing immediate financial hardship.
Your small business must be an established business, have financial statements demonstrating it was profitable in one of the past three years, and be able to project sufficient cash flow to meet current and future loan payments over a two-year period from loan approval. If your business does not meet these criteria, you can discuss your eligibility with your lender. ARC loans are not designed for start-up businesses.
Examples of qualifying loans may include credit card obligations for your business, capital leases, notes payable to vendors/suppliers, Development Company Loan Program (504) first lien loans, other loans to small businesses made without an SBA guaranty, and loans made by or with an SBA guaranty on or after Feb. 17, 2009.
ARC loans are designed to help businesses experiencing immediate financial hardship for reasons such as
- Loss/reduction of customer base
- Increase in cost of doing business
- Loss/reduction of working capital and/or loss/reduction of short term credit facilities
- Inability to restructure existing debts due to credit restrictions
- Loss/reduction of employees (intellectual capital)
- Loss/reduction of major suppliers (major suppliers out of business)
Where do I get the forms?
URL to download the SBA forms if you think you might want to do this you can visit Business.gov and download the forms at:
or best, bet, contact your bank and ask for the SBA ARC Loan officer. Many banks have customized these forms from the generic ones here, so you’ll end up filling out twice.