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.