Basics of the SBA $35,000 ARC Loan

The America’s Recovery Capital, or ARC, loan program is designed to give viable small businesses suffering immediate financial hardship some temporary financial relief so they can keep their doors open and get their cash flow back on track.

The ARC loan program is a new, temporary program authorized by the Recovery Act. An ARC loan is a deferred-payment loan of up to $35,000, to be used for principal and interest payments on existing, qualifying debt/loans .

ARC loans are 100% guaranteed by SBA to the lender

The SBA will pay the monthly interest at the rate of Prime plus 2% to the lender on behalf of the borrower. There are no interest charges to the borrower.

There is a disbursement period of up to six months followed by 12 months with no repayment of the ARC loan principal (Effectively, 18 month before repayment begins)

The borrower pays back only the ARC loan principal over a 5 year period

A loan made directly to you to use however you would like to

A working capital loan

A Start-Up Loan

A Business Acquisition Loan

A loan to be applied to regular bills or standard invoices

A loan to be used for any PERSONAL DEBT

Viable means the business is an established, for-profit business with evidence of profitability or positive cash flow in at least one of the past two years . An analysis of financial statements going back three years is also used. Future cash flow projections based on reasonable growth going out two years should show that the business will be able to meet current and future debt obligations, including future repayment of the ARC loan. Also, the borrower must certify that they are currently no more than 60 days past due on any loan being paid with an ARC loan and they must have an acceptable business credit score as determined by SBA. 1. How is “viable” defined? 3 Main Issues to be Eligible for the ARC Loan Program www.BusinessBorrowersAlliance.org Business Borrowers Alliance, LLC © 2009

The following are some examples of conditions causing immediate financial hardship:

Loss/Reduction of customer base

Increase in cost of doing business

Loss/reduction of Working Capital and/or loss/reduction of short term Credit Facilities over

Decline in Gross Margin over the preceding 12 months

Decline in Operating Ratios over the preceding 12 months

Inability to restructure existing debts due to credit restrictions within the preceding 12 months

Loss/Reduction of Employees

Loss/Reduction of Major Suppliers (major suppliers out of business)

2. What constitutes “ immediate financial hardship”? Immediate financial hardship means that there must be evidence to show a change in the financial condition such as declining sales, frozen credit lines, difficulty meeting payroll, paying rent, difficulty making loan payments or perhaps something else. Your lender must analyze and confirm that a hardship exists. www.BusinessBorrowersAlliance.org Business Borrowers Alliance, LLC © 2009

Qualifying small business loans/debts that are eligible for assistance with ARC loans include:

Secured & unsecured conventional loans in the business name (mortgages, term and revolving lines of credit)

Capital leases

Notes payable to vendors/suppliers/utilities – not ordinary invoices

Credit card obligations for business purposes

An SBA-guaranteed loan made with an SBA guaranty after Feb. 17, 2009 .

CDC Loan Program (SBA 504 Loan) first mortgage loans

3. What loans/debts are “qualifying” and eligible to benefit from ARC? Can the proceeds be used to make payments on another SBA-guaranteed loan? The only eligible purpose for use of ARC loan proceeds is to make periodic payments of principal and interest on qualifying small business loans. www.BusinessBorrowersAlliance.org Business Borrowers Alliance, LLC © 2009

ARC loans can be used to pay home equity lines of credit and credit card obligations if the debt is for business purposes that meets 7(a) standards. Documentation requirements for assistance with home equity and credit card debt are stringent . Can ARC loans be used to pay a home equity line of credit and credit card debt? www.BusinessBorrowersAlliance.org Business Borrowers Alliance, LLC © 2009

ARC loans are made by commercial lenders

ARC loans are not made by the SBA itself

A small business should talk first to their current bank about obtaining an ARC loan. Any bank that your business has a lending relationship with should be interested in participating in this program

Banks and credit unions that are not currently SBA lenders can become SBA lenders in order to make ARC loans.

SBA Form 2315 – ARC Loan Application, but other necessary documents include

Tax returns – Corporate & Personal for any owner with 20% or more interest in the business

Debt Schedules

Statement of Personal History

Personal Financial Statement

Loan and Capital consulting guiding small business in acquiring and structuring their financing

SBA Loan Deferment

SBA Loan Modification & Loan Restructuring

SBA ARC Loan Packaging

Business Borrowers Alliance The principals of Business Borrowers Alliance have over 30 years combined experience in the SBA Lending Industry . We are also small business owners who understand our clients. We have held positions in Sales Management, Lending and Credit Operations for some of the best known SBA Lenders. Our firm is dedicated to helping Small Businesses with financial consulting services including: www.BusinessBorrowersAlliance.org Business Borrowers Alliance, LLC © 2009

SBA ARC Loan Packaging Services We will provide DIRECT & INDIVIDUAL assistance to every client with the complete loan application process until loan closing. Our specific services will include:

Initial phone consultation to determine that you situation will meet the basic eligibility requirements according to the SBA ARC Loan Guidelines.

(For those who meet the standards) A comprehensive list of required documentation including the generic information needed for every application and specific support information based on your situation

Provide customized forms and templates to expedite the process

Direct assistance with the completion of the applications and forms

Direct Assistance with the completion of the financial projections required for every application

Summary cover page to be included in your loan package

Interaction with your lender to ensure that your application will meet any specific requirements that they will have.

SBA ARC Loan Packaging Services What our services mean for our clients Based on our background and expertise in SBA lending, our staff has become immersed in all aspects of $35000 ARC Loan program so that we can provide our clients with the best advice and guidance in obtaining these loans. We understand the application documents, as well as the specific details of the program eligibility requirements. Having attended the ARC Loan lender training presented by the SBA, we know what the lenders need and have created financial projection template forms that will ensure uniform documentation which will comply with all the guidelines. Because Lenders are prohibited from charging a fee for processing your loan application, many of them will find it costly to provide extensive assistance with your application package. As experienced professionals with SBA Loans, we are able to deliver expertise and individual attention to borrowers seeking the ARC Loans. www.BusinessBorrowersAlliance.org Business Borrowers Alliance, LLC © 2009

SBA ARC Loan Packaging Services Our Mission Business Borrowers Alliance will use all of our knowledge, experience and capabilities to provide guidance and assistance to borrowers seeking the SBA ARC Loan program, offering them the greatest opportunity for approval of their loan application. www.BusinessBorrowersAlliance.org Business Borrowers Alliance, LLC © 2009

Business Borrowers Alliance SBA ARC Loan Packaging Services For more information, call 866-944-3866 Visit http://www.businessborrowersalliance.org or email [email_address] www.BusinessBorrowersAlliance.org Business Borrowers Alliance, LLC © 2009