$35,000 ARC Loan - Update

Recently released from the SBA website:

The new American Recovery Capital (ARC) program will offer “viable” small business temporary six-month loans of up to $35,000.

As you look around, many businesses will meet the criteria of being important, viable businesses that haven’t missed a payment yet, but their credit lines are down, their sales are down a bit and they’re having hardship and they really could use this.

SBA is expecting these short-term loans will be used for helping ease a credit crunch, as banks call in balances on credit cards.  By paying down your credit card line you now have $35,000 more of liquidity.

The interest-free loan must be used within six months and borrowers have up to six years to repay it. The only other stipulation is that it cannot be used to pay any previous SBA-backed loan the business may have outstanding.

The ARC program, effective June 15, is part of the larger Recovery Act that President legislated earlier this year. That bill earmarked $15.4 billion to purchase existing SBA-backed loans from banks to free up lenders to make more loans and stimulate the so-called “secondary” market that had stalled.

ARC loans are to be offered by most banks and commercial lenders.  Once we get more information on the program we will post updates on our site loanforbiz.com.