Unpacking the Stimulus Package: ARC Update

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sbalogo1Unpacking the Stimulus Package, Vol.2

Small businesses hoping to take advantage of the SBA’s America’s Recovery Capital Loan Program (“ARC”) should be proactive in securing their place in the program, which only allows for about 10,000 loans nationwide, or an average of 200 per state. The SBA anticipates a high demand for these loans, so businesses looking to apply should make sure they have all of their paperwork and supporting documentation ready by the June 15th launch of the program.

Business owners should first verify that their bank participates in the ARC program. For a list of banks that make SBA loans, click here. Each bank will set its own procedures and timeline for issuing loans. It is likely that applicants will need to provide financial statements (and/or tax returns) for the past two years – showing the business was profitable before the economic downturn and can become profitable again. In general, the business must have been profitable in at least one of the last 3 years to be eligible for the ARC program.

Applicants will also need to provide information about the loans that they intend to pay with ARC funds. Each lender will be limited to 50 loans per week. If a bank makes less than 50 loans, they can carry the unused allocation over to other weeks, but lenders will be capped at a maximum of 1,000 loans through the program’s duration. The ARC loan program is scheduled to run through Sept. 30, 2010, or until its funding runs out, whichever comes first.  Loan proceeds are provided over a six-month period and repayment of the ARC loan principal is deferred for 12 months after the last disbursement of the proceeds.  Repayment can extend up to five years.

Brooks Rainey Pearson is a dual degree student at UNC working toward a law degree as well as a master's degree in City and Regional Planning. Brooks graduated from UNC in 1999 with a bachelor's degree in Anthropology and spent six years in the Outer Banks where she owned and operated three yoga...
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