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National Small Business Week Shines Spotlight on New Interest Free SBA ARC Loan

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National Small Business Week Shines Spotlight on New Interest Free SBA ARC Loan

By Caron_Beesley, Contributor
Published: August 18, 2010

Note: The ARRA (Recovery Act) initiatives and/or programs referenced in this article will expire on September 30, 2010. Any statements about qualifying time periods, or extensions of these dates, as they pertain to the availability of ARRA programs are over-ridden by the expiration of the Act on September 30, 2010.


This week is National Small Business Week - and this year the spotlight is firmly on recovery - most notably in the form of an unprecedented new loan program for debt-burdened entrepreneurs.


Hosted by the Small Business Administration (SBA), this annual event sees top entrepreneurs congregate from around the country on Washington. D.C. for a celebration of small business.

Along with awards and key note addresses, including new SBA Administrator Karen Mills, attendees also have the opportunity to learn from industry experts developing success strategies to deal with real world issues - in particular, how to survive in a down economy.

For those of you who ca;t travel - you can also participate virtually via streaming webcasts of key sessions.

More than Just Great Events - the SBA Announces New Loan Program for Debt-Burdened Small Businesses

With its unofficial theme of recovery for small business, National Small Business Week provided an appropriate platform for the government to announce a significant new loan program for struggling business owners - the American Recovery Capital Loan (ARC) Program.

Guaranteed by the SBA, the ARC Loan Program provides interest free loans of up to $35,000 to small businesses 'for the purpose of making principal and interest payments on existing, qualifying small business loans for up to six months'.

These loans can include credit card loans, capital leases, 504 loans, other loans made without an SBA guaranty, and loans made with or without an SBA guaranty since February 17, 2009.

For the untold thousands of business owners across the country who are trying to work through an economic recession tha-s left them with falling revenues that no longer cover operating expenses, debts and the basic cost of living - the ARC Loan Program is good news.

Below are more specifics on the ARC Loan, qualification criteria, and where to apply for the loan:

What is an ARC Loan?

The ARC Loan provides up to $35,000 to qualified small businesses 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. The loan is interest free and 100% guaranteed by the SBA. No collateral is needed and there are no fees associated with the loan.

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.

Who is Eligible for an ARC Loan?

The loan is available to viable, for profit small businesses in the U.S. with qualifying small business loans (described above) who are experiencing immediate financial hardship (such as declining sales or revenues or if you are struggling to pay your business operating expenses). Examples of qualifying loans are described earlier in this article.

To qualify, you must be able to prove the viability of your business by providing evidence that you can project sufficient cash flow to be able to meet the loan payments over a two-year period from the loan approval date.

Where to Apply for an ARC Loan

As with other SBA-backed loans, ARC Loans are provided by commercial lenders. Your lender or bank can help determine your eligibility. You can also contact the SBA to learn more about the ARC Loan Program. Your Local SBA Office and other can also offer more information in your region.

For more information about the ARC Loan Program, visit the SB-s dedicated Web page about the ARC loan program.

Other Resources

About the Author:

Caron Beesley

Contributor

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

Comments:

this is a very beneficial advantage to small business owners specially in today's time when getting loans from banks is so stuff with credit crunch and everything. small business owners can use all the benefits that they can get. this is a beneficial step in that direction.  
this is a very beneficial advantage to small business owners specially in today's time when getting loans from banks is so stuff with credit crunch and everything. small business owners can use all the benefits that they can get. this is a beneficial step in that direction.  
Good to read this article. It is helpful for small scale businesses. I also want to start my own small business. So suggest me some new ideas regarding this. small business -- This post was edited to remove a commercial link. Read our discussion policies for more Community best practices.
Good to read this article. It is helpful for small scale businesses. I also want to start my own small business. So suggest me some new ideas regarding this. small business -- This post was edited to remove a commercial link. Read our discussion policies for more Community best practices.
I am on the ARC loan program and SBA lender. But there is no incentive for the financial institutions have the loans rely. London Corporate Corporate SurreyMessage Edited by NicoleD on 09-30-2009 10:54 AM
I believe loans are what caused this bust in the economy these past two years! I would steer clear unless I absolutely had to get money for some important reason.Butch WeberButch Weber's Winblaze Blog for Affiliate MarketersMessage Edited by NicoleD on 09-30-2009 10:53 AM
My Business is entirely through the internet which, despite the hard times is holding it's own, but what about other internet only companies? Does the Arc program support them? Engagement RingsMessage Edited by NicoleD on 09-30-2009 10:53 AM
This could be an option for those starters but If I would prefer, starting business and having a debt is not a good idea for me. I mean why won't I start a business from the money I have enough to start one. blietzkrieg Message Edited by NicoleD on 09-23-2009 04:16 PM
Also something to keep in mind that this loan is for a narrow scope of businesses. There are a lot of eligibility requirements. I read just a few...1. You have to have made a profit in the last two years.2. Funds cannot be used to repay debt past 60 daysI applaud the SBA for the effort, but what is the incentive for the banks... Blake SladeArizona Wedding Photography Message Edited by NicoleD on 09-23-2009 04:08 PM
In times of uncertainty loans should be a detailed investigation. The deeper you loan the more you have to answer to someone. Great points.

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