For small businesses in an immediate financial bind, the Small Business Administration has come to the rescue by establishing a new loan program.
On June 15, the SBA began accepting loans of up to $35,000 from commercial lenders, as a part of its temporary new program, America’s Recovery Capital (ARC). The loans are designed to provide once profitable but now struggling small businesses with immediate funds to invest in sustaining their businesses, retain jobs and otherwise work to gain financial stability.
“These ARC loans are another tool in the SBA toolkit which will provide critical support to small businesses struggling to make it through these tough economic times,” said SBA administrator, Karen Mills.
While start-up businesses are not eligible for ARC loans, viable, for-profit small businesses in the United States that have qualifying small business loans and are experiencing immediate financial struggles are eligible. An eligible business must be able to provide financial statements indicating it was profitable in one of the past two years and must be able to project adequate income to successfully make current and future loan payments over a two-year period from the date of loan approval.
ARC loans are intended to assist businesses that are experiencing immediate financial hardship for reasons such as loss or reduction of customer base, increase in cost of doing business, loss or reduction of working capital and/or loss or reduction of short-term credit facilities, inability to restructure existing debts as a result of credit restrictions, loss or reduction of employees, and loss or reduction of major suppliers (i.e., if major suppliers have gone out of business).
Qualifying small-business debt for which loan funds will be provided include mortgages, term and revolving lines of credit, capital leases, credit card obligations, and notes payable to vendors, suppliers and utilities.
More information about applying for an ARC loan can be found here.
