The SBA's New "ARC" Loan

I've been asked about this program a lot lately, so I thought I'd blog about it. Thanks to the Obama administration, the Small Business Administration (SBA) is now offering a brand new deferred payment loan for small businesses struggling to keep their doors open. The loan program, expected to last through September 30, 2010 and called the ARC loan (America's Recovery Capital) works like this:

• A viable business that needs temporary financial assistance for working capital or employees gets $35,000
• The business does not have to pay on the loan's principal for a WHOLE year, while the SBA makes the business' interest payment to the bank on its behalf
• The loan is guaranteed 100% by the SBA (this is huge because they now guarantee 90%)
• The loan is interest free
• There are no SBA fees
• Repayment period is five years
• Proceeds can be used to pay on mortgage, unsecured lines of credit, credit card debt (as long as the debt was used for business purposes).

The catch? Well no one knows for sure who qualifies yet. A viable business could mean the SBA has some guidelines of its own. I will keep updated with my bankers regarding business criteria and will keep you updated. Stay tuned... To get more information, visit the Small Business Administration's 2009 Recovery Act.

About the Author: Cheryl Isaac is the writer of this blog and a Startup Business Consultant & Owner of Isaac Business Services, an agency that offers startup concierge & business planning services for small businesses (http://www.isaacbusinessservices.com/)