Small Businesses: Get Your ARC Loan Here (…or maybe not)

July 22, 2009 in Business | 4 comments

Seal of the U.S. government's Small Business A...

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I saw a very informative post on a CPA friend’s blog in Charlotte, NC about the A.R.C. loans.  I had forgotten all about these loans and their availability to the small business community.

The America’s Recovery Capital (A.R.C.) loans administered by the Small Business Administration are meant to be bridge loans of up to $35k for small businesses with legitimate hardships.  You don’t pay the SBA any freakin’ fees and there is no interest cost to you, the borrower.  The government is soooo nice.

But don’t get too excited, it seems a lot of financial institutions aren’t even participating in the program.  Here is an excerpt from the blog post by Chad:

It will be interesting to see how all of this ultimately goes down.  Based on the details that I have read, there seems to be little risk on the part of the lender; however, many of them have been hesitant to get on board with the program.

Check out the comments on the post (read it here) to see an update to the financial institutions participating, as well as links to other good articles.

See ya, Jason M. Blumer

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  1. Patrick’s avatar

    Patrick on July 22, 2009 at 7:38 am

    As a small business owner who has recently been going through tough times and has current challenges I would be interested in learning more about this program. What kind advice can you give? Could this be used to consolidate some business debts I am having a hard time meeting the obligations for?

  2. thriveal’s avatar

    thriveal on July 22, 2009 at 8:27 am

    Who knows, Patrick. The SBA normally asks for tons of paperwork, which takes about three months or more to fill out, and then we have to find a bank to actually administer the loan.

    As mentioned in the comments to the blog I linked to above, it looks like your best bet is to have all of your depository accounts at BB&T and then approach them to see if you would be able to apply for the funding.

    It’s worth a shot just asking, but these SBA loans are typically harder to get than they make them sound. That’s not very encouraging – sorry about that. Sometimes I’m too much of a realist!

  3. Neal Gordon’s avatar

    Neal Gordon on July 27, 2009 at 8:15 am

    The SBA ARC Loan program continues to be problematic for many struggling small businesses. The loan amount is too small to help many businesses (Ask Congress why they thought this would be enough). The amount of documentation is nearly the same as is needed for a $1million loan. And the biggest issue that borrowers are facing is finding a lender who will loan to them, which is based on the type of qualifying debt that applicant has. So even if a business is qualified, it is far from automatic that they get a loan. As the article intimates, banks are wary and the debt they “prefer” are the term loans, notes and capital equipment leases, because the borrower can’t draw back on them once the ARC Loan pays off that debt.

    My company, Business Borrowers Alliance, is contacting the large and mid-sized banks to learn if they are participating and what their specific requirements are. We provide direct assistance and help to businesses throughout the complete ARC Loan application process.

    For more information, contact us at 866-944-3866 or mail@businessborrowersalliance.org

    Neal Gordon
    http://www.businessborrowersalliance.org

  4. thriveal’s avatar

    thriveal on July 27, 2009 at 4:20 pm

    Neal-

    Thanks for those updates. Maybe my clients can benefit from your company? Thanks for taking the time to add value to the post.

    Jason Blumer