Archive for the ‘SBA’ Category

SBA ARC Loans:More Details

June 11th, 2009 admin

Caleb Groos posted this concise update on SBA ARC Loans via his FindLaw blog:

Despite the federal recovery efforts to increase lending to small businesses, the loans many small businesses have waited on are the Small Business Administration (SBA) emergency ARC loans designed to help struggling businesses temporarily bridge the financial gap. The SBA has released more details about which businesses will be eligible for the loans, set to become available next week.

As discussed previously, the ARC loans, to come from private lenders, will be for up to $35,000. Borrowers will not have to make any payments for a year after disbursement. After that, they’ll have 5 years to pay off the loan. Recipients may use the funds to pay down debt (except other SBA loans made before February 17, 2009). The SBA will pay lenders prime plus 2% interest on the loans, but borrowers will need to repay only the principal.

In terms of eligibility, these loans are designed for small “viable” businesses with “immediate economic hardship.” The first thing to know is that ARC loans are not for new businesses.

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CNN: Emergency Small Business Loans

June 8th, 2009 admin

The CNN take on Arc Loans:

Starting next week, struggling companies will be able to apply for up to $35,000 in debt-relief loans through a new stimulus program.

By Emily Maltby, CNN

NEW YORK (CNNMoney.com) — One week before its emergency loan program is slated to launch, the Small Business Administration issued guidelines for banks and borrowers on how the new loans will work.

Called “America’s Recovery Capital,” ARC loans are designed to make up to $35,000 available to struggling small business owners to temporarily help them keep up with payments on existing loans, including credit card debt. Authorized as part of February’s stimulus bill, the program has been under development for four months. Many banks were waiting for the SBA’s procedural guidance, released Monday, before deciding whether or not to participate.

Here’s a primer on how the emergency loans will work.

Eligibility: Sorry, startups, this isn’t for you. ARC loans are only open to businesses that have been in operation for at least two years and have been profitable in at least one of the last two years.

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Beware of Imitators- The Official SBA ARC Loan Website

June 8th, 2009 admin

There is a non government web site claiming on its Google advertisement to be “The Official SBA ARC Loan Website.”  Wouldn’t you think the SBA’s website would be the official ARC Loan website? Well it IS. Be wary where you get your information.

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ARC Loan Guidelines Released! Here is the Latest!

June 8th, 2009 admin

We just picked this up on the Reuters Blog as posted by Jon Cook. No word on participating banks yet. Stay tuned…

NEW ARC LOAN GUIDELINES ANNOUNCED TODAY

 Today the U.S. Small Business Administration announced new lender guidelines for the America’s Recovery Capital (ARC) loan program it unveiled last month.

According to the SBA release, the ARC program provides emergency funds, in the forms of deferred loans, of up to $35,000 to “viable small businesses suffering immediate financial hardship.” These loans are not provided directly by the SBA, but through SBA-backed lenders – mostly smaller or community banks – and are 100 percent guaranteed by the government and have no lender fees attached.

The SBA defines a “viable” business as an “established, for-profit business with evidence of profitability or positive cash flow in at least one of the past two years.” The term “immediate financial hardship” is subsequently defined by the SBA as “evidence to show a change in the financial condition such as declining sales, frozen credit lines, difficulty meeting payroll, paying rent, difficulty making loan payments or perhaps something else.”

SBA lenders will start dispensing ARC loans next week,  on June 15.

Eric Zarnikow, associate administrator for Capital Access – the SBA department overseeing the new loans, said he expects 10,000 ARC loans to be doled out over the next 15 months until the September 30, 2010 cutoff date.

In an attempt to make sure all small businesses from across the country benefit from the program, Zarnikow said there will be an ARC loan cap of 50 per week to each SBA-approved lending institution, with no more than 1,000 loans issued from any one lender in total.

If a lender was only able to make 30 loans in any one weekly period, they would be able to catch up the next week by making up to 70 loans, in what Zarnikow referred to as a “rollover” provision.

“We will be evaluating these limitations from time to time,” said Zarnikow, adding the first one will be done in August.

Borrowers will not have to make any payments for the first year and will have an additional 5 years to pay back their loan. Only one loan per applicant is allowed and potential burrowers must not have any existing SBA loans.

For complete information on the ARC loan program, visit the SBA’s website: http://www.sba.gov/recovery/arcloanprogram/index.html

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Small Business Administration ARC Loan Program Rules to be published June 8th

June 6th, 2009 admin

On June 8, the SBA will publish regulations for its new ARC loan program. On June 15, 2009, SBA will formally open the new temporary loan program. ARC loans of up to $35,000 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. According to the SBA, “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.” An eligible small business borrower must be an established business, have financial statements demonstrating profitability 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.
Examples of qualifying existing loans for which the ARC loans can be used to provide some short-term relief include credit card obligations for a 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 February 17, 2009.

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Car, Boat, RV Dealers Now Eligible for SBA Loans

June 2nd, 2009 admin

SBA Will Offer Floor Plan Financing to Auto, RV, Other Dealerships Beginning July 1

KOKOMO, IND. – The U.S. Small Business Administration will offer government guaranteed loans to finance inventory for eligible auto, recreational vehicle, boat and other dealerships under a new pilot program announced today by SBA Administrator Karen Mills.
Dealer Floor Plan (DFP) financing will be available beginning July 1, according to Mills. She announced the new program during a visit to Kokomo, Ind., with Dr. Ed Montgomery, President Barack Obama’s Director of Recovery for Auto Communities and Workers.
“Countless small businesses, including dealerships, across the country are facing significant challenges as a result of the uncertainty in the auto industry,” Mills said. “Floor plan financing can offer some dealerships the opportunity to get through these tough economic times by allowing them to keep their inventory and cash flow intact, as well as save the jobs these small businesses provide.”
Mills and Montgomery discussed the new DFP pilot program, as well as other resources offered by SBA and the federal government to help small businesses in communities impacted by the troubles facing the auto industry.
“Small businesses are the engine of our economic growth,” Dr.

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Small Business Lending Improving

May 21st, 2009 admin

Florida First Capital Finance Corporation (FFCFC) posted this release today as sent by the SBA. The winds of capital access are blowing better.

Small Business Lending Beginning to See Upswing

It’s finally happening. Efforts to get money to capital-strapped small businesses are beginning to work as banks have returned to making loans backed by the federal government, according to Karen Mills, the new Small Business Administration (SBA) head.

More than 10,000 loans have been approved following the February enactment of the American Recovery and Reinvestment Act of 2009 (ARRA), representing about $3 billion in credit support for small businesses, Mills recently reported during a Senate briefing on the SBA’s efforts under ARRA.

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