SBA ARC loan

As part of the 2009 American Recovery and Reinvestment Act, ARC loans were created by SBA. These are loans that provide financial assistance to businesses who are experiencing short-term problems that are making it financially difficult to meet obligations. These loans help business facing temporary financial hardship to retain jobs, and stay in business.

ARC loans are not provided by the SBA directly, but by commercial lenders who partner with the SBA to provide loans to small businesses. The SBA guarantees these loans.

The eligibility criteria for ARC loans are as follows:
1. You have never received an ARC loan before. There is only one available per business. If you have had one in the past, you won't get one again. This is a one shot deal.
2. You have to be a business that has been profitable in the past, but have hit a financial difficulty that is making it difficult to make your payments on other loans.
3. You have to have financial documentation showing that you have been profitable for one of the past two years, and have cash flow projections that show you will be able to sufficiently able to meet current and future loan payments. Your pro forma, or cash flow projection needs to be for two years out.
4. You have to be struggling to meet financial obligations, but not be seriously delinquent on your existing business loans. Businesses that are far behind on payments are not good candidates for ARC loans. They have to prove financial hardship, such as showing decreased revenue, loss of market share, or some other decline that makes it difficult to pay your bills. However, this can't be an insurmountable hardship. You have to show that with a little help to get past the rough patch, and keep your doors open, you will be able to not just stay in business, but grow.
5. They must have qualifying business loans, such as business credit cards, capital leases, etc. You can check SBA.gov to get more information about what business loans will qualify for an ARC loan.
If you are eligible and you are approved for an ARC loan, you will get up to $35,000 of short-term relief to help you meet financial obligations. The ARC loans are to be used to pay principal and interest on one or more existing business loans, and can be used for up to six months. When those six months are up, the business will then have another 12 months of deferred interest on the loan in order to get financially stable enough to meet these payment obligations, and stay on your feet. ARC loans have 100% SBA guarantee, and are interest free for six months, and offer deferred interest for another twelve months. The borrower then has five years to repay the loan. Hopefully an SBA ARC loan will help you get through financial difficulty, and allow you to grow and progress as a business.