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.
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 that’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.