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| Emergency Small Business Loans Are Here! |
| Wednesday, December 31,1969 07:00 PM |
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After months of teasers, the ARC program for small businesses has finally been rolled out to banks. Starting next week, companies struggling to keep up with their debt will be able to apply for up to $35,000 in debt relief funds through the new stimulus program.
Called "America's Recovery Capital," ARC loans are designed to make up to $35,000 available to struggling small business owners to temporarily help them keep up with payments on existing loans, including credit card debt.
That's the important part. According to CNNMoney.com:
Borrowers can use ARC loans to cover payments on their personal credit cards if the money was borrowed for business expenses. "We do recognize the merging of the owners' and businesses' finances," says Eric Zarnikow, the SBA's associate administrator for capital access.
There are some rules (actually, lots of them). Here's a smattering of what a small business will need to do, be and prove:
-ARC loans are only open to businesses that have been in operation for at least two years and have been profitable in at least one of the last two years.
-Borrowers can use ARC loans to make payments for up to six months on their existing debt, with no repayment due on the loan for another year.
-Applicants must prove they are experiencing financial hardship, as evidenced by declining sales (a drop of at least 20% over the past year), frozen credit lines, rising business costs (again, 20% or more in the past year), or difficulty meeting payroll, paying rent or making loan payments.
-Borrowers also have to be running a "viable" small business.
-Borrowers must show cash-flow projections for at least the next two years.
-Borrowers must have "acceptable" business credit scores, and they can't be more than 60 days past due on any loan they'd like ARC funds to help cover.
There's more, but you get the idea. Good news, though, don't you think? Finally, an opportunity to pay off those small business credit cards that may have a) jacked up your interest rate, b) cut off (or down) your credit limit or c) closed their doors altogether.
Read the whole thing at http://money.cnn.com/2009/06/08/smallbusiness/arc_emergency_small_business_loans.smb/?postversion=2009060818
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