What is an ARC Loan?
- The America’s Recovery Capital, or ARC, loan program is designed to give
- viable small businesses suffering immediate financial hardship some temporary financial relief so they can keep their doors open and get their cash flow back on track.
- The ARC loan program is a new, temporary program authorized by the Recovery Act.
- An ARC loan is a
- deferred-payment loan of up to $35,000,
- to be used for principal and interest payments on existing, qualifying debt/loans.
- ARC loans are 100% guaranteed by SBA and have no SBA or lender fees associated with them (unless the lender must secure collateral as part of the loan).
- There are no interest charges to the borrower. The SBA will pay the monthly interest at the rate of Prime plus 2% to the lender on behalf of the borrower. The current rate is published in the Federal Register.
- There is a disbursement period of up to six months followed by 12 months with no repayment of the ARC loan principal. After the 12-month deferral period, the borrower pays back only the ARC loan principal over a period of five years.
Posts
1 comment:
Very concise explanation of the program.
Unfortunately, one big problem for borrowers is locating a SBA ARC Loan from a lender who is not their bank. Many of the banks want to provide loans to current customers only, especially if they hold a loan from that customer. Also, many banks have additional requirements for the loans beyond what the SBA has required. Finally, lenders have different policies as to whether they will make minimum payments on debt or will make larger payments toward the total debt. But not one of the banks is happy about having to process and underwrite a loan package for a $35,000 loan that requires nearly as much information, documentation and support as is needed for a regular sized SBA 7(a) loan.
My company, Business Borrowers Alliance, is contacting the large and mid-sized banks to learn if they are participating and what their specific requirements are. We provide direct assistance and help to businesses throughout the complete ARC Loan application process.
For more information, contact us at 866-944-3866, mail@businessborrowersalliance.org or visit www.businessborrowersalliance.org
Post a Comment