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There is no application process through the SBA. To apply for an ARC loan, interested ones have to apply directly through a commercial lender. In other words, you do so through your financial institution. However, not all banks and credit unions are SBA lenders.
When you contact them, ask them if they are administering ARC loans. If so, ask them to help you determine if you are an eligible candidate. If so, you will be required to fill out a typical business loan application and it will have to go through an approval process.
Applicants will have to prove that they are not a start-up, and have been in business for at least 3 years. They will have to provide balance sheets, income statements, and cash flow statements to prove that your company has been profitable for at least one of the past two years. In addition, applicants will have to prove that they are currently experiencing financial difficulties - but not enough whereas you can't meet the loan payments.
If approved, the borrower will continue making the loan payments to the same lender - but with no interest. The lender, though, will be billing the SBA, and the SBA will pay Prime plus 2% to the lender on behalf of the borrower.
Note: If you contact a bank and they do not make ARC loans, check back frequently because many of them are in the process of becoming an SBA lender. |
