The Small Business Administration (SBA) announced yesterday that small businesses can now begin submitting applications for its temporary new program called America’s Recovery Capital, or “ARC” for short. These loans are designed to provide a bridge to small businesses that have an immediate financial hardship – and can be for amounts up to $35,000.
The SBA defines a financial hardships as any of the following:
Other quick facts are as follows:
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 hesitent to get on board with the program. A CNNMoney article last week revealed that most SBA lenders hesitant to jump into the program. While the rate to the lender is variable, it isn’t as high as some of the other SBA loan programs. This could be a turnoff to some banks, but as an SBA spokesperson pointed out in the CNNMoney article, there is virtually no risk to the lender since the SBA is providing a 100% guarantee.
Please let me know of your experiences with ARC loans – whether it be finding a lender who is doing these or any pro’s and con’s you have seen through the process. I know a lot of businesses that will be applying for these in the next few weeks – providing that they can find lenders.
For more information on ARC Loans, visit the ARC Loan portion of the SBA’s Website.