Sound too good to be true? Here's the real story....the Small Business Administration (SBA) is responding to the current economic recession with the recently announced ARC Loan Program. This loan program is designed to provide short term relief of up to $35,000 to small businesses facing an immediate financial hardship. Here are some of the other benefits:
- No collateral required
- No SBA loan fees
- No payments for at least the first 12 months
Sounds great...I would like a dozen of these!!
Unfortunately, it's not quite that simple. To begin with, each small business is limited to one ARC loan. To qualify you will also need the following:
- Your business is suffering an immediate financial hardship (such as declining revenues or difficulty making loan or vendor payments)
- Financial statements demonstrating that your business had a positive cash flow in 1 of the last 3 years
- Cash flow projections for the next 2 years indicating that you will be able to meet your current and future loan payments
- Your business is no more than 60 days past due on any loan
ARC loans are not intended for start-ups, businesses that are already severely delinquent or businesses whose past performance/future cash flow indicate that the business is not viable.
If you have any additional questions regarding the new ARC loan program or any of the many recent SBA loan program improvements, please contact your lender orour Director of Business Consulting, Paul Breimayer at Ghirardo CPA at 415-408-5021.