Senator Claire McCaskill : Missouri

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June 15, 2009

McCaskill: Stimulus Loan Program Can Help Your Small Businesses

WASHINGTON, D.C. – U.S. Senator Claire McCaskill applauded the Small Business Administration (SBA) on a new program that begins today which would loan up to $35,000 to “viable” small businesses that can demonstrate “immediate financial need”. The America’s Recovery Capitol (ARC) loan program received $255 million through the American Recovery and Reinvestment Act, also known as the economic stimulus package, to help small businesses survive and prosper through the current economic downturn.

“There are thousands of Missouri small businesses that are barely staying afloat as a result of our current economy. There’s no doubt that between their Missouri resilience and common sense business skills, Missouri small business owners will pull through, but certainly a small loan would help these folks remain on their feet,” McCaskill said.

The ARC loan program, which begins today, will continue until funds have been exhausted, or until September 30, 2010. These deferred-payment loans have no lender fees and no interest charges to the borrower. Funds are distributed over a period of up to six months. After the loan has been fully paid out, the borrower has 12 months before repayment is necessary. The borrower then has up to five years to pay back the loan in full.

Included in the stimulus package was instruction to the SBA to undertake a Business Stabilization Program to provide deferred loans to small businesses that are deemed “viable”, but are also experiencing “immediate financial need”, which resulted in the ARC loan program. According to the SBA, descriptions to meet ARC criteria include:

Viable:

“For-profit small businesses in the U.S. that have qualifying small business loans and are experiencing immediate financial hardship. Such businesses must have financial statements showing they were profitable in one of the last 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.”
Qualifying loans include credit card (business) debt, capital leases, notes payable to venders/suppliers, Development Company Loan Program loans, etc.

Immediate Financial Need:

Requires evidence of decline in financial condition: loss of customer base; increased costs; loss of working capital and short term credit; and others.

Additional general information about the ARC loan program can be obtained by visiting www.sba.gov and clicking on the “ARC Loans” icon on the right. Commercial lending institutions provide all ARC loans; however, if the current lender for a small business is not participating in the ARC program, the following SBA offices can be reached for more information: Kansas City at (816) 426-4900, Springfield at (417)-890-8501, and St. Louis at (314)539-6600.

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