Loan structure
• An ARC loan is a deferred-payment loan of up to $35,000.
• ARC loans will be used to make up to six months of principal and interest payments on qualifying loans
for existing viable for-profit small businesses in the United States.
• Disbursement period (up to six months) is followed by 12 months with no repayment of the ARC loan
principal, followed by a repayment period of five years. SBA pays monthly interest to the bank.
How lenders benefit
• Reduced Risk: 100 percent guaranty provides greater security and confidence to lend.
• Guaranteed Interest: SBA will pay monthly interest to the lender at reasonable rates throughout the term
of the loan.
• Conventional, commercial business loans (and SBA-guaranteed loans made on or after Feb. 17, 2009) are
an eligible use for ARC loan proceeds.
• Proceeds may be used to pay on mortgages, secured and unsecured loans, lines of credit and credit cards
if the debt was used for eligible business purposes under the program.
• SBA turnaround on non-delegated loan applications – expected within five to ten business days.
Access to E-Tran, SBA’s electronic application process available to SBA delegated lenders.
• Existing SBA lenders are eligible to make ARC loans and delegated lenders may make ARC loans on a
delegated basis.
How the community benefits
• SBA loans help build and retain community businesses, create jobs and stimulate economic activity.
How small business owners benefit
• ARC loans are interest-free to the borrower, have deferred payments for 12 months, and have no SBA
fees associated with them.
• ARC loans will allow borrowers to redirect cash flow from making loan payments to investing in their
businesses.
• Banks will begin investing in small businesses again, making credit more readily available for those
businesses that need it.
• Streamlined applications by SBA.
SBA loan programs now provide greater incentives to you the lender, are more affordable for small business
owners, and help to drive economic recovery in your community.
For more information, click on http://www.sba.gov/recovery.
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