ARC Loans for Small Businesses
Saturday, August 22nd, 2009One Federal Progam that has not yet received a lot of press coverage, but may be a useful life-preserver for small businesses is the American Recovery Capital loan program, commonly referred to as an ARC Loan. The ARC program provides up to $35,000 in no-interest financing for up to five years to meet current debt obligations, credit card debt and other financial needs.
This new program is administered by the Small Business Administration (SBA) and is available for companies who have been in business for at least two years and are suffering financial difficulties caused by the recession. While the loan can be used for a variety of purposes, it is generally used to pay down existing loan facilities or credit card debt. The ARC loan carries no interest or front-end fees and, depending on the drawdown schedule, is repaid over 5 and a half years. The ARC loan is a great way to reduce interest payments and spread out the amortization of your borrowings over a longer period.
Like all SBA loans, these loans are granted by an SBA-Certified Lender in your state. To find a certified lender, select your state and then choose “financing” on the right side of your state’s SBA web page. Easy navigation is not one of the SBA’s strong points, but with a little effort you should be able to track down the list of “Certified Lenders” in your state.
Most commercial banks that are Certified Lenders tend to use the ARC program to assist their existing clients, so it is best to seek out your local banker to help you sort through the enormous amount of paperwork this loan entails. If you are experiencing liquidity problems and/or would like to reduce your interest payments, the ARC loan program might prove useful.
Richard W. May
Therese Saint Clair