Welcome
SBA Economic Recovery Efforts <ul><li>$375 Million for temporary fee reductions or eliminations on SBA loans and increased...
SBA Economic Recovery Efforts  <ul><li>Lenders with the Columbus District have increased  lending dollars by over 50% over...
American’s Recovery Capital or ARC <ul><li>$255 Million for ARC to help small businesses meet existing debt payments. </li...
American’s Recovery Capital or ARC What are the details on this program: <ul><li>How is SBA defining “viable”: </li></ul><...
American’s Recovery Capital or ARC <ul><li>ARC loan is not for: </li></ul><ul><ul><li>start ups  </li></ul></ul><ul><ul><l...
American’s Recovery Capital or ARC <ul><li>Ineligible small business for the ARC loans are the same as 7 (a) loans  </li><...
American’s Recovery Capital or ARC <ul><li>How is SBA defining “Immediate Financial Hardship: </li></ul><ul><ul><li>An imm...
American’s Recovery Capital or ARC <ul><li>ARC loans are up to $35,000. </li></ul><ul><li>Loan is made by participating 7(...
American’s Recovery Capital or ARC <ul><li>There is no interest charges to the borrower as SBA will pay the interest rate ...
American’s Recovery Capital or ARC <ul><li>Examples of qualified small business loans which can repaid with ARC funds: </l...
American’s Recovery Capital or ARC <ul><li>Loan procceds cannot be used for: </li></ul><ul><ul><li>Any purpose other than ...
American’s Recovery Capital or ARC <ul><li>Small businesses who are interested in applying will need to provide to the len...
American’s Recovery Capital or ARC <ul><li>cont </li></ul><ul><ul><li>Past 3 years tax returns  </li></ul></ul><ul><ul><li...
American’s Recovery Capital or ARC <ul><li>Credit Criteria  </li></ul><ul><ul><li>Quarterly cash flow showing sufficient c...
American’s Recovery Capital or ARC <ul><li>If you need assistance with producing the two years of quarterly cash flow proj...
American’s Recovery Capital or ARC <ul><li>Is Collateral pledge going to be required?  </li></ul><ul><ul><li>That depends ...
American’s Recovery Capital or ARC <ul><li>Data Universal Numbering System (DUNS) number.  </li></ul><ul><ul><li>DUNS numb...
American’s Recovery Capital or ARC <ul><li>Funds are limited.  Based upon the subsidy model, SBA projects about 10 – 12 th...
American’s Recovery Capital or ARC <ul><li>First step in obtaining an ARC loan is to contact your current lender </li></ul...
American’s Recovery Capital or ARC <ul><li>Wells Fargo 1-800-359-3557 -  non existing customers  </li></ul><ul><li>Nationa...
Dealer Floorplan Loans <ul><li>The Dealer Floor Plan Pilot Initiative – Summary </li></ul><ul><ul><li>A pilot 7(a) loan pr...
Micro Loans <ul><li>The stimulus bill provided SBA with $30 million to expand Micro Lending.  </li></ul><ul><ul><li>Micro ...
Surety Bonding <ul><li>The stimulus bill provided SBA with $15 million to increase access to surety bonding.  </li></ul><u...
American’s Recovery Capital or ARC <ul><li>Additional information is available on SBA’s web page at:  www.sba.gov. </li></...
Links <ul><li>www.grants </li></ul><ul><li>www.irs.gov </li></ul><ul><li>www.ecdi.com </li></ul><ul><li>www.score.org </li...
Thank you for attending <ul><ul><li>SBA – Columbus District Office </li></ul></ul>
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SBA ARC Seminar

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  • Most loans have some degree of risk. Each bank must decide how much risk the bank is willing to take. The SBA guaranty loan program is intended to assist in making loans that the bank believes will be good loans, and to a small businesses in which the bank has confidence, but for some reason does not quite meet the bank’s normal credit standards. Usually this is due to a lack of adequate collateral or capital, or because the business is a start-up.
  • Most loans have some degree of risk. Each bank must decide how much risk the bank is willing to take. The SBA guaranty loan program is intended to assist in making loans that the bank believes will be good loans, and to a small businesses in which the bank has confidence, but for some reason does not quite meet the bank’s normal credit standards. Usually this is due to a lack of adequate collateral or capital, or because the business is a start-up.
  • Most loans have some degree of risk. Each bank must decide how much risk the bank is willing to take. The SBA guaranty loan program is intended to assist in making loans that the bank believes will be good loans, and to a small businesses in which the bank has confidence, but for some reason does not quite meet the bank’s normal credit standards. Usually this is due to a lack of adequate collateral or capital, or because the business is a start-up.
  • Most loans have some degree of risk. Each bank must decide how much risk the bank is willing to take. The SBA guaranty loan program is intended to assist in making loans that the bank believes will be good loans, and to a small businesses in which the bank has confidence, but for some reason does not quite meet the bank’s normal credit standards. Usually this is due to a lack of adequate collateral or capital, or because the business is a start-up.
  • Most loans have some degree of risk. Each bank must decide how much risk the bank is willing to take. The SBA guaranty loan program is intended to assist in making loans that the bank believes will be good loans, and to a small businesses in which the bank has confidence, but for some reason does not quite meet the bank’s normal credit standards. Usually this is due to a lack of adequate collateral or capital, or because the business is a start-up.
  • Most loans have some degree of risk. Each bank must decide how much risk the bank is willing to take. The SBA guaranty loan program is intended to assist in making loans that the bank believes will be good loans, and to a small businesses in which the bank has confidence, but for some reason does not quite meet the bank’s normal credit standards. Usually this is due to a lack of adequate collateral or capital, or because the business is a start-up.
  • Most loans have some degree of risk. Each bank must decide how much risk the bank is willing to take. The SBA guaranty loan program is intended to assist in making loans that the bank believes will be good loans, and to a small businesses in which the bank has confidence, but for some reason does not quite meet the bank’s normal credit standards. Usually this is due to a lack of adequate collateral or capital, or because the business is a start-up.
  • Most loans have some degree of risk. Each bank must decide how much risk the bank is willing to take. The SBA guaranty loan program is intended to assist in making loans that the bank believes will be good loans, and to a small businesses in which the bank has confidence, but for some reason does not quite meet the bank’s normal credit standards. Usually this is due to a lack of adequate collateral or capital, or because the business is a start-up.
  • Most loans have some degree of risk. Each bank must decide how much risk the bank is willing to take. The SBA guaranty loan program is intended to assist in making loans that the bank believes will be good loans, and to a small businesses in which the bank has confidence, but for some reason does not quite meet the bank’s normal credit standards. Usually this is due to a lack of adequate collateral or capital, or because the business is a start-up.
  • Most loans have some degree of risk. Each bank must decide how much risk the bank is willing to take. The SBA guaranty loan program is intended to assist in making loans that the bank believes will be good loans, and to a small businesses in which the bank has confidence, but for some reason does not quite meet the bank’s normal credit standards. Usually this is due to a lack of adequate collateral or capital, or because the business is a start-up.
  • Most loans have some degree of risk. Each bank must decide how much risk the bank is willing to take. The SBA guaranty loan program is intended to assist in making loans that the bank believes will be good loans, and to a small businesses in which the bank has confidence, but for some reason does not quite meet the bank’s normal credit standards. Usually this is due to a lack of adequate collateral or capital, or because the business is a start-up.
  • Most loans have some degree of risk. Each bank must decide how much risk the bank is willing to take. The SBA guaranty loan program is intended to assist in making loans that the bank believes will be good loans, and to a small businesses in which the bank has confidence, but for some reason does not quite meet the bank’s normal credit standards. Usually this is due to a lack of adequate collateral or capital, or because the business is a start-up.
  • Most loans have some degree of risk. Each bank must decide how much risk the bank is willing to take. The SBA guaranty loan program is intended to assist in making loans that the bank believes will be good loans, and to a small businesses in which the bank has confidence, but for some reason does not quite meet the bank’s normal credit standards. Usually this is due to a lack of adequate collateral or capital, or because the business is a start-up.
  • Most loans have some degree of risk. Each bank must decide how much risk the bank is willing to take. The SBA guaranty loan program is intended to assist in making loans that the bank believes will be good loans, and to a small businesses in which the bank has confidence, but for some reason does not quite meet the bank’s normal credit standards. Usually this is due to a lack of adequate collateral or capital, or because the business is a start-up.
  • Most loans have some degree of risk. Each bank must decide how much risk the bank is willing to take. The SBA guaranty loan program is intended to assist in making loans that the bank believes will be good loans, and to a small businesses in which the bank has confidence, but for some reason does not quite meet the bank’s normal credit standards. Usually this is due to a lack of adequate collateral or capital, or because the business is a start-up.
  • Most loans have some degree of risk. Each bank must decide how much risk the bank is willing to take. The SBA guaranty loan program is intended to assist in making loans that the bank believes will be good loans, and to a small businesses in which the bank has confidence, but for some reason does not quite meet the bank’s normal credit standards. Usually this is due to a lack of adequate collateral or capital, or because the business is a start-up.
  • Most loans have some degree of risk. Each bank must decide how much risk the bank is willing to take. The SBA guaranty loan program is intended to assist in making loans that the bank believes will be good loans, and to a small businesses in which the bank has confidence, but for some reason does not quite meet the bank’s normal credit standards. Usually this is due to a lack of adequate collateral or capital, or because the business is a start-up.
  • Most loans have some degree of risk. Each bank must decide how much risk the bank is willing to take. The SBA guaranty loan program is intended to assist in making loans that the bank believes will be good loans, and to a small businesses in which the bank has confidence, but for some reason does not quite meet the bank’s normal credit standards. Usually this is due to a lack of adequate collateral or capital, or because the business is a start-up.
  • Most loans have some degree of risk. Each bank must decide how much risk the bank is willing to take. The SBA guaranty loan program is intended to assist in making loans that the bank believes will be good loans, and to a small businesses in which the bank has confidence, but for some reason does not quite meet the bank’s normal credit standards. Usually this is due to a lack of adequate collateral or capital, or because the business is a start-up.
  • Most loans have some degree of risk. Each bank must decide how much risk the bank is willing to take. The SBA guaranty loan program is intended to assist in making loans that the bank believes will be good loans, and to a small businesses in which the bank has confidence, but for some reason does not quite meet the bank’s normal credit standards. Usually this is due to a lack of adequate collateral or capital, or because the business is a start-up.
  • Most loans have some degree of risk. Each bank must decide how much risk the bank is willing to take. The SBA guaranty loan program is intended to assist in making loans that the bank believes will be good loans, and to a small businesses in which the bank has confidence, but for some reason does not quite meet the bank’s normal credit standards. Usually this is due to a lack of adequate collateral or capital, or because the business is a start-up.
  • Most loans have some degree of risk. Each bank must decide how much risk the bank is willing to take. The SBA guaranty loan program is intended to assist in making loans that the bank believes will be good loans, and to a small businesses in which the bank has confidence, but for some reason does not quite meet the bank’s normal credit standards. Usually this is due to a lack of adequate collateral or capital, or because the business is a start-up.
  • Most loans have some degree of risk. Each bank must decide how much risk the bank is willing to take. The SBA guaranty loan program is intended to assist in making loans that the bank believes will be good loans, and to a small businesses in which the bank has confidence, but for some reason does not quite meet the bank’s normal credit standards. Usually this is due to a lack of adequate collateral or capital, or because the business is a start-up.
  • SBA ARC Seminar

    1. 1. Welcome
    2. 2. SBA Economic Recovery Efforts <ul><li>$375 Million for temporary fee reductions or eliminations on SBA loans and increased SBA guaranteed percentage up to 90%. </li></ul><ul><li>7(a) & 504 is SBA’s dominant loan product. </li></ul><ul><li>What does this mean – </li></ul><ul><ul><li>This eliminated upfront 7(a) fees associated with SBA guaranteed loans </li></ul></ul><ul><ul><li>Participant lenders will receive increased government backing to encourage lending to for-profit small businesses. </li></ul></ul><ul><ul><li>SBA fees associated with 504 loans have also been reduced. </li></ul></ul>
    3. 3. SBA Economic Recovery Efforts <ul><li>Lenders with the Columbus District have increased lending dollars by over 50% over the last 10 weeks </li></ul><ul><li>versus first 10 weeks in 2009. </li></ul><ul><li>In the first 100 days of the recovery act over 113 </li></ul><ul><li>million dollars in loans have been made to Ohio </li></ul><ul><li>small businesses. </li></ul>
    4. 4. American’s Recovery Capital or ARC <ul><li>$255 Million for ARC to help small businesses meet existing debt payments. </li></ul><ul><li>Designed to give Viable small businesses suffering Immediate Financial Hardship some temporary financial relief. </li></ul>
    5. 5. American’s Recovery Capital or ARC What are the details on this program: <ul><li>How is SBA defining “viable”: </li></ul><ul><ul><li>An established for-profit business with evidence of profitability or positive cash flow in at least one of the past two years. </li></ul></ul><ul><ul><li>Going concern </li></ul></ul><ul><ul><li>Difficulty making periodic payments of principal and interest on qualifying small business loans and/or meeting operating expenses </li></ul></ul><ul><ul><li>Must show ability to project continued operations beyond the sixth month period of payment assistance with ARC Loan </li></ul></ul>
    6. 6. American’s Recovery Capital or ARC <ul><li>ARC loan is not for: </li></ul><ul><ul><li>start ups </li></ul></ul><ul><ul><li>change of ownership </li></ul></ul><ul><ul><li>business expansion </li></ul></ul><ul><ul><li>Previous loss to government </li></ul></ul>
    7. 7. American’s Recovery Capital or ARC <ul><li>Ineligible small business for the ARC loans are the same as 7 (a) loans </li></ul><ul><ul><li>Casinos </li></ul></ul><ul><ul><li>Casino Hotels </li></ul></ul><ul><ul><li>Other Gambling Industries </li></ul></ul><ul><ul><li>Golf Courses and County Clubs </li></ul></ul><ul><ul><li>Zoos and Botanical Gardens </li></ul></ul><ul><ul><li>Fitness and Recreational Sports Centers </li></ul></ul>
    8. 8. American’s Recovery Capital or ARC <ul><li>How is SBA defining “Immediate Financial Hardship: </li></ul><ul><ul><li>An immediate financial hardship is difficulty making payment of </li></ul></ul><ul><ul><li>P & I on loans and/or difficulty meeting operating expenses </li></ul></ul><ul><li>Examples </li></ul><ul><ul><li>Declining sales </li></ul></ul><ul><ul><li>Frozen Credit Line </li></ul></ul><ul><ul><li>Difficulty Meeting Payroll </li></ul></ul><ul><ul><li>Difficulty Making Loan Payments </li></ul></ul><ul><ul><li>Difficulty purchasing inventory, materials or supplies </li></ul></ul>
    9. 9. American’s Recovery Capital or ARC <ul><li>ARC loans are up to $35,000. </li></ul><ul><li>Loan is made by participating 7(a) lenders with 100% SBA guarantee. </li></ul><ul><li>SBA does not have direct lending authority with this program. </li></ul><ul><li>Use of proceeds is restricted for payment on monthly debt service </li></ul><ul><li>Payment on line of credit. </li></ul>
    10. 10. American’s Recovery Capital or ARC <ul><li>There is no interest charges to the borrower as SBA will pay the interest rate to the lender at prime (presently 3.25%) plus 2% adjustable monthly for life of the loan. </li></ul><ul><li>Disbursement period of up to 6 months followed by </li></ul><ul><li>12 months of no payments on the ARC loan then </li></ul><ul><li>Five year amortization of the principal balance (60 equal payments to repay the principal amount of the loan.) </li></ul>
    11. 11. American’s Recovery Capital or ARC <ul><li>Examples of qualified small business loans which can repaid with ARC funds: </li></ul><ul><ul><li>Secured or unsecured conventional loans. </li></ul></ul><ul><ul><li>Credit card debt (used exclusively for the business) </li></ul></ul><ul><ul><li>Capital Leases </li></ul></ul><ul><ul><li>Notes Payable (A/P converted to note payable) </li></ul></ul><ul><ul><li>Home equity loans used to finance business operations </li></ul></ul>
    12. 12. American’s Recovery Capital or ARC <ul><li>Loan procceds cannot be used for: </li></ul><ul><ul><li>Any purpose other than P & I payments on QSBL </li></ul></ul><ul><ul><li>Personal expenses </li></ul></ul><ul><ul><li>Payment or refinance funds used for payments or loans to an associate of borrower </li></ul></ul><ul><ul><li>SBA guaranteed loans (prior to Feb 17, 2009) </li></ul></ul>
    13. 13. American’s Recovery Capital or ARC <ul><li>Small businesses who are interested in applying will need to provide to the lender: </li></ul><ul><ul><li>Balance sheet & income statements. </li></ul></ul><ul><ul><li>Personal financial statement on the principles. </li></ul></ul><ul><ul><li>Listing of qualified small business loans which you want to pay. </li></ul></ul><ul><ul><li>Two years of quarterly cash flow projections which indicate the business’s ability to meet its debt service requirements. </li></ul></ul>
    14. 14. American’s Recovery Capital or ARC <ul><li>cont </li></ul><ul><ul><li>Past 3 years tax returns </li></ul></ul><ul><ul><li>Personal Guaranty for each owner owning 20% or more </li></ul></ul><ul><ul><li>Statement which best describes the immediate financial hardship your business has experenced and provide statement regarding the hardship. </li></ul></ul><ul><ul><li>ARC application </li></ul></ul><ul><ul><li>IRS form 4506 T </li></ul></ul>
    15. 15. American’s Recovery Capital or ARC <ul><li>Credit Criteria </li></ul><ul><ul><li>Quarterly cash flow showing sufficient cash flow to meet debt </li></ul></ul><ul><ul><li>Certify that debt is current or not more than 60 days past due </li></ul></ul><ul><ul><li>Deferred loans are not considered past due until deferred more than 3 months </li></ul></ul><ul><ul><li>SBA will credit score the personal & business information as part of the approval process </li></ul></ul>
    16. 16. American’s Recovery Capital or ARC <ul><li>If you need assistance with producing the two years of quarterly cash flow projections, the Small Business Development Centers / SCORE which are located throughout the State of Ohio can assist you for free in the production of this information. </li></ul>
    17. 17. American’s Recovery Capital or ARC <ul><li>Is Collateral pledge going to be required? </li></ul><ul><ul><li>That depends on the bank’s/credit union’s internal lending policy for loans of $35,000 or less. </li></ul></ul><ul><ul><li>If the lender doesn’t require collateral on conventional loan product of $35K or less, than only the signatures of the business and principles owning 20% or more will be required. </li></ul></ul><ul><ul><li>If the lender normally requires collateral, then the borrower is going to be expected to pledge available business/personal assets. </li></ul></ul>
    18. 18. American’s Recovery Capital or ARC <ul><li>Data Universal Numbering System (DUNS) number. </li></ul><ul><ul><li>DUNS number is nine-digit number need to obtain credit score </li></ul></ul><ul><ul><li>First step is to verify if you already have a DUNS number </li></ul></ul><ul><ul><li>https://fedgov.dnb.com/webform - click Go or Enter </li></ul></ul><ul><ul><ul><li>Legal Name </li></ul></ul></ul><ul><ul><ul><li>Physical Address, City, State and Zip Code mailing if different </li></ul></ul></ul><ul><ul><ul><li>Telephone Number </li></ul></ul></ul><ul><ul><ul><li>Contact Name and Title </li></ul></ul></ul><ul><ul><ul><li>Number of Employees at your location </li></ul></ul></ul><ul><ul><li>If you see your business listed select “Request your DUNS number “ </li></ul></ul><ul><ul><li>If your business and location is not listed, click request a New DUNS number </li></ul></ul><ul><ul><li>If your business is located inside the US call 1-866-705-5711 </li></ul></ul>
    19. 19. American’s Recovery Capital or ARC <ul><li>Funds are limited. Based upon the subsidy model, SBA projects about 10 – 12 thousand loans will be made nationwide. </li></ul><ul><li>If you feel you would qualify for an ARC loan, SBA encourages you to speak with your lender and get the process started. </li></ul>
    20. 20. American’s Recovery Capital or ARC <ul><li>First step in obtaining an ARC loan is to contact your current lender </li></ul><ul><li>Ask if they are participating in ARC loan program </li></ul><ul><li>If they are not, contact other lenders in your immediate community. </li></ul><ul><li>To access a list of SBA lenders listed by counties </li></ul><ul><ul><li>www.sba.gov/localresouces/district/oh.columbusOH_Columbus_LENDERINFO_INDEX.html </li></ul></ul><ul><li>The ARC Loan Program is an entirely new program. We are working with lenders to promote the program and offer assistance. We are encouraged and feel that we will continue to see a rise in participation by area lenders. </li></ul>
    21. 21. American’s Recovery Capital or ARC <ul><li>Wells Fargo 1-800-359-3557 - non existing customers </li></ul><ul><li>National City Bank 1-888-622-4249 - current customers </li></ul><ul><li>PNC Bank 1-800-762-5684 - current customers </li></ul><ul><li>Tell Ohio Credit Union – Jerome Jones 221-3233 – non existing customers </li></ul><ul><li>Huntington National Bank – existing customers </li></ul>
    22. 22. Dealer Floorplan Loans <ul><li>The Dealer Floor Plan Pilot Initiative – Summary </li></ul><ul><ul><li>A pilot 7(a) loan program – Federal Register Notice </li></ul></ul><ul><ul><li>Began July 1, 2009 and expires 9/30/2010 with Recovery Act provisions </li></ul></ul><ul><ul><li>“ Titleable” inventory eligible (automobiles, boats, RVs, motorcycles, mobile homes, etc) </li></ul></ul><ul><ul><li>Loan size: $500,000 - $2 million </li></ul></ul><ul><ul><li>5-Year maximum term </li></ul></ul><ul><ul><li>Eligible for Recovery Act borrower SBA fee relief </li></ul></ul><ul><ul><li>Pricing: Base rate plus 2 ¼ %; 2% max. fee limit waived </li></ul></ul><ul><ul><li>Any SBA eligible lender can participate </li></ul></ul><ul><ul><li>Lender must have policies specific to DFP in 6 areas; submitted to Loan Guarantee Processing Service Center with first loan </li></ul></ul><ul><ul><li>Guaranties range between 60% and 75% depending on advance rate and collateral type </li></ul></ul>
    23. 23. Micro Loans <ul><li>The stimulus bill provided SBA with $30 million to expand Micro Lending. </li></ul><ul><ul><li>Micro loans are made through local intermediaries with a maximum amount of $35,000. </li></ul></ul><ul><ul><li>This is a non-traditional source of capital which underwrites each application, but can be more flexible than a traditional lender. </li></ul></ul><ul><ul><li>A local micro lender is: </li></ul></ul><ul><ul><ul><li>ECDI (Economic and Community Development) in Columbus, OH. </li></ul></ul></ul><ul><ul><ul><li>Their phone number is (614) 559-0115 </li></ul></ul></ul>
    24. 24. Surety Bonding <ul><li>The stimulus bill provided SBA with $15 million to increase access to surety bonding. </li></ul><ul><li>Bonding guaranty amount increased from $2 to 5 million to help small businesses compete for federal construction and service contracts. </li></ul><ul><ul><li>If you are interest in SBA surety bonding guaranty, please give us a call at (614) 469-6860. </li></ul></ul>
    25. 25. American’s Recovery Capital or ARC <ul><li>Additional information is available on SBA’s web page at: www.sba.gov. </li></ul><ul><li>My e-mail address is shannon.feucht@sba.gov or our local phone number is (614) 469-6860. </li></ul>
    26. 26. Links <ul><li>www.grants </li></ul><ul><li>www.irs.gov </li></ul><ul><li>www.ecdi.com </li></ul><ul><li>www.score.org </li></ul><ul><li>www.sbdc.org </li></ul><ul><li>www.sba.gov/recovery/index.html </li></ul><ul><li>www.sba.gov/services/training/onlinecourses/index.html </li></ul>
    27. 27. Thank you for attending <ul><ul><li>SBA – Columbus District Office </li></ul></ul>
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