The Small Business Administration's ARC Loan Program is off to a slow start. Basically, the problem is that banks don't want to add to their already troubled loan portfolio by lending to yet another troubled business, even though the SBA is guaranteeing the loans. Troubled businesses are exactly who ARC Loans target. As a result, bank response to the program has been slow.
Very few of the large banks have jumped on the bandwagon. Most banks that have made ARC loans are small to medium-sized local or regional community banks. If you are seeking an ARC loan, check out this list of lenders in each state. These banks have already made ARC loans. This list is updated by the SBA.
Banking for small businesses is all about relationships. If your bank is not supporting the ARC program, it is not supporting your business. Change banks! Change to one of these banks willing to support small business -- the backbone of our economy! Move your business account and apply for an ARC loan if you need one. Banks are very competitive with each other these days. Chances are, your new bank will serve you as well or better than the one who won't give you the ARC loan in the first place! Good luck!
The SBA ARC Loan program continues to be problematic for many struggling small businesses as this program has evolved in unexpected ways compared to what was touted when it was launched. The loan amount is too small to help many businesses (Ask Congress why they thought this would be enough). The amount of documentation is nearly the same as is needed for a $1million loan. And the biggest issue that borrowers are facing is finding a lender who will loan to them, which is based on the type of qualifying debt that applicant has. So even if a business is qualified, it is far from automatic that they get a loan. As the article intimates, banks are wary and the debt they “prefer” are the term loans, notes and capital equipment leases, because the borrower can’t draw back on them once the ARC Loan pays off that debt.
My company, Business Borrowers Alliance, is continuing to contact the banks that have been named as participants to learn what their specific requirements are and most continue to only want to do ARC Loans for only their customers that specifically have loans at their bank.
For more information, contact us at 866-944-3866 or mail@businessborrowersalliance.org
Neal Gordon
http://www.businessborrowersalliance.org
We provide direct assistance and help to businesses throughout the complete ARC Loan application process.
I have been frustrated by the bank’s response to the ARC Loan program. I spent four full days preparing the application and shopped it to my current bank and the only other bank in the area considering these loans. I had numerous conversations with The SBA both locally & nationally to confirm that what I was requesting was within the eligibility requirements. I was told that my business was the perfect candidate.
I have been sorely disappointed and rejected by both banks. One didn’t want to take on debt that was clearly defined as eligible and the other didn’t believe in my business (20 plus years and going). It appears to me that the banks won’t lend to businesses distressed but will lend to those not really requiring the ARC Loan program, (could borrow normally). Certainly not the intent of the program as conceived. When I reported to the SBA my experience they expressed disappointment and confirmed they have received numerous complaints from applicants. So where’s the help now??
The handling of this SBA ARC program and the Obama Administration and Democratic Party policy on small business lending policy in general, thus far, may likely be their single largest public policy blunder to date.
The antipathy created by public pronouncements, those lauding support for small businesses, as the key to job creation and then to go stiff small business while using public monies to pay large executive bonuses for publicly bailed-out multinational financial institutions is a guarenteed way to be voted out of your office.
It’s axiomatic. If you are running for office, don’t tick off the guy who makes the campaign signs.
I have tried to no avail to get this extra special loan. My bank who I had been with for years,(the greedy bank of America) won’t do them. And any other bank won’t do them unless the dept is with them. So this is just another stimulous that does not reach the people who need it. Needless to say bank of America will not see any more of my money.
Talked to Wachovia yesterday and their policy is to loan only to those that they hold the mortgage on. Then they would only pay the mortage for six months up to a max of $5,000. I asked, if my mortgage is $1,100 a month, then six months was $6,600 and would they go to that amount? They said no, max of $5,000.
Talked to Regions this morning. They will go a max of $35,000 on paying a mortgage that they hold but nothing on overdue lines of credit.
Ken: Thanks for reporting on this. It’s good information for others to know. Sorry that you’re having such a problem.
Rosemary
Talked to Wells Fargo today. They offer the program but they do not really want to provide the loan. They said if they do the loan all of the ARC Loan has to be used to pay a Wells Fargo credit loan that you already have with Wells. I thought they already had gotten enough with the Stimulus $ they received, now they want even more Stimulus $ by taking the ARC Loan.
It is a real pity that banks aren’t lending to small businesses. Small businesses make up for a very high percentage of jobs in our nation, and the more they keep going under for lack of funds, the worse shape we are in. It’ll be much harder for us to get out of the recession if the banks continue ignoring small businesses.
Its sad to say that all of your comments above are correct. I am a small business owner and have tryed unsuccessfully with Suntrust Bank who I bank with to be advised that you must have debt with their bank. I advise the loan advisor we do have debt, we have a business credit card with them. He said no must be equipment loans or something along those lines. He also told me that the stimulus plan was left up open ended meaning that they can set their own rules each bank that is. Its disappointing that I may have to close my business for this very reason. I have employed over 19 employees and have had to let go, downsize and cut hours due to no business funding available. What must we do to be heard. Disappointed
You can take Home State off the list for Colorado… I have all my checking with them and they would not even give me an application because they say “We have not been very successful with the program and only one out of 10 ever qualified for it anyway” even though I have had my checking with them and have had it with them for 7 years they would not even give me an application.
Uncle Scam
I have been trying for a month now to get someone from ANY of the banks listed in Illinois to even call me back about the ARC loan. My own bank that I have been with for 25 years will not even discuss this loan with me because I have no debt with them. When I called the SBA, they told me they wish they could help, but I really need to keep trying with the banks.
For the person who was denied an application, you should try somewhere else (preferably a credit union). The main reason your having trouble that bank is these loans are an administrative nightmare for the lender. To make matters worse, there is very little profit in them. However, if you want the loan bad enough keep trying because they are available, I’ve written 3 already. But be prepared, they are an enormous amount of work for the business owner AND lender.
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I contacted Wells Fargo (who I do all my Personal and Business banking with) and was informed that they would only do an ARC Loan to retire existing debt with Wells Fargo….is this allowed under the provisions of this program?
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I was recently denied an ARC loan by Chase Bank. Even though I have had my business for over 4 years, do not have a single negative points in my credit, they still found “Insufficient Cash flow” as to their reason for denial. I called them 2 times, and they are not willing to tell me what is the cut off point for having sufficient or insufficient cash flow; I showed my documents to 2 CPA.s, and both confirmed that my Cash Flow is in a very good position and it is not the reason for denial. It is amazing that I submitted over 1.5 inches of documents for them; and they are not willing to have a straight answer; they just deny because they want to; without a valid reason.
Uggh!! I hope everyone who reads this votes obama OUT!!!! I am a business owner for over 17 yrs. I had excellent credit until the economy went bust. For awhile I thought I would skim by…. but this has went on far to long. I have been late on several payments, now have credit card debt, and behind on paying my vendors. I went to the Capital One Bank, who I have done business with for over 19 yrs and cant get a loan. Contacted the SBA.. What a JOKE.. What does the sba do?? Notta. obama’s (did not capitalize because i do not feel he needs the respect) Small Business Jobs Act is a joke.. so is the arc, 504 loans & sba 7a loan.. no one is qualified… i wa approved with ACCION… with an 18% interest rate….lol ugh I am soooo frustrated!!! I am not a fly by nigh contractor. In March of 09 I had 20 employees.. the last yr and a hlf just ONE!!!!
Hey, I just read info on the ARC loans on the SBA website. It says that the ARC loan is only to be used to pay principal and interest on existing loans. That means that this only benefits the banks to process these loans. If you “receive” the loan, you only use it to pay the bank debt. you cannot use it for buying inventory or to pay suppliers or employees.
One big caveat is that it only covers 6 months of P&I. So it is some help, but nothing that I would call a stimulus to your business!
I think the problem is that banks don’t want to deal with the SBA, too much bureaucracy! If they get up to $35,000 of their loans secured by the SBA, all the headache is not worth the extra effort. Thus my conclusion is that the SBA is more headache than helper to the American dream, and these other excuses that the business owners are receiving from the banks are are just a polite way to avoid dissing the SBA.
After all, the SBA is made up of bankers, so don’t expect bankers to badmouth their own kind.
Just like the reason that politicians do not criticize lawyers (and vice versa)? Because they are all lawyers, and give each other the professional courtesy that they do not deserve.
Sarafor Forsenka is a total farse. He has you fill out documents, authorizes it then wants an up front fee for the loan. DON’t DO IT. He wanted a whopping $500.00 to retreive money. He is a liar. I’m sure there will be identity theft also.
“Sarafor Forsenka is a total farse. ”
Really, did you think it would be a good place to get a loan? Shame on you
I had no idea! I will delete any reference to him. Rosemary
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