SCORE
I know what a tough time many of our Chamber members are having keeping their nose above the rising tide called the economy. I also know that while programs like this can be a godsend, the whole application process can be daunting - so daunting that even if you are eligible, you don't apply because the hoops you have to jump through are too many or too difficult to navigate.
1) two important dates to save
2) the text of the SCORE email describing the program
3) a list of Chamber member banks that are SBA preferred lenders (NOTE: The Chamber contacted the banks today and as soon as we know which of them will be participating in the ARC program, we will let you know).
BIG THANK YOU’S TO
At SCORE: Charlie Roover, the on-call SCORE counselor today, who helped connect me to the right people, Marty Kress for listening to me (again!), Seymour Salette for coordinating the June 11 counselors
At Robbins Library: Ellen Porretta for coordinating our use of the Community Room
At Cambridge Savings Bank: Mike Kuhn who sent along clarifying information
At East Cambridge Savings Bank: John Macomber who offered to prepare a check list of information business owners need to start collecting now
EVENTS (There is no charge to attend either event)
Tuesday, June 9 (7:30-9:00am) at Robbins Library Community Room
Ann Rice Hunt, the Boston ARC coordinator, will come to
Thursday, June 11 (9:00am-till ) at Robbins Library Community Room
A battery of SCORE counselors (our ARC SWAT team!) with financial expertise will be on hand for brief confidential one-on-one consultations to help you understand and collect the information you will need for your ARC application.
SCORE EMAIL TEXT
Real Help for Small Business : SBA Readies Terrific New Loan Program to Help Small Business Survive
If your existing small business is stressed meeting expenses during these economic times, the U.S. Small Business Administration has a new loan program designed just for you.
SBA's
Starting June 15th, ARC loans (100% SBA guarantied, 0% interest, 5 year loan) will be offered by some SBA lenders for as long as funding is available or until September 30, 2010, whichever comes first. Each small business is limited to one ARC loan.
About the ARC Loan Program
ARC loans can be used to make payments of principal and interest, in full or in part, on one or more existing, qualifying small business loans for up to six months. ARC loans provide an immediate infusion of capital to small businesses to assist with making payments of principal and interest on existing debt. These loans allow borrowers to redirect cash flow from making loan payments to investing in their businesses, to help sustain the business and retain jobs. For example, making loan payments on existing loans with proceeds from an ARC loan can allow a business to focus more funds on core operations, such as buying inventory or making payroll.
ARC loans do not require collateral, are interest-free to the borrower, carry a 100 percent guaranty from the SBA to the lender, and require no fees paid to SBA. 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.
The best candidates for ARC loans are small businesses that are struggling, yet have been making loan payments, or those just beginning to miss loan payments due to financial hardship.
ARC loans are made by commercial lenders who are SBA participants. Businesses interested in applying for an ARC loan should first contact their current lender
ARC Loan Eligibility
ARC loans are available to viable, for-profit small businesses in the U.S. that have qualifying small business loans and are experiencing immediate financial hardship. Your small business must be an established business, have financial statements demonstrating it was profitable in one of the past three years, and be able to project sufficient cash flow to meet current and future loan payments over a two-year period from loan approval. If your business does not meet these criteria, you can discuss your eligibility with your lender. ARC loans are not designed for start-up businesses.
Examples of qualifying loans may include credit card obligations for your business, capital leases, notes payable to vendors/suppliers, Development Company Loan Program (504) first lien loans, other loans to small businesses made without an SBA guaranty, and loans made by or with an SBA guaranty on or after Feb. 17, 2009.
ARC loans are designed to help businesses experiencing immediate financial hardship for reasons such as:
-Loss/reduction of customer base
-Increase in cost of doing business
-Loss/reduction of working capital and/or of short term credit facilities
-Inability to restructure existing debts due to credit restrictions
-Loss/reduction of employees (intellectual capital)
-Loss/reduction of major suppliers (major suppliers out of business)
Borrowers whose loans are already severely delinquent or whose past performance or future cash flow indicates that the business is not viable are not good candidates for an ARC loan.
Applying for an ARC Loan
ARC Loans are provided by commercial lenders and guaranteed by the SBA. Your next step is to contact your lender who will help you determine if you are a candidate for an ARC Loan. (NOTE: See list below of Chamber member banks that are SBA preferred lenders.)
Questions they may ask include the following:
Does your small business have an established banking relationship?
Has your small business been in operation for a minimum of two years?
Do you have financial statements (balance sheet, income statement, and cash flow statement) which demonstrate your business had a positive cash flow in one of the past three years (or as long as your business has been operating, if less than three years)?
Does your cash flow projection for the next two years indicate sufficient cash flow to meet your current and future loan payments?
Regarding your debts, is your business no more than 60 days past due on any loan (you can be current on all your debt obligations and still qualify for an ARC Loan)?
Is your business suffering an immediate financial hardship? For example:
Declining sales and revenues;
Difficulty in making loan payments on existing debt;
Difficulty in paying employees;
Difficulty in purchasing materials, supplies, or inventory;
Difficulty in paying rent and/or other operating expenses
CHAMBER MEMBER BANKS THAT ARE PREFERRED SBA LENDERS
(NOTE: Using SBA data, the Chamber contacted members that are SBA preferred lenders today to find out if they will be participating in the ARC program.)
- Brookline Bank
- Cambridge Savings Bank (confirmed ARC lender)
- Citizens Bank
- East Cambridge Savings Bank (confirmed ARC lender)
- Leader Bank
- TD Banknorth
$255 million is available beginning June 15. It's available on a first come first serve basis. The Chamber's goal is to give eligible business owners a head start with access to critical resources that can help them be among the first in line to apply if they are eligible for this program.
