In The News

SBA says loan program growing

Although news reports have spotlighted applicants being unsuccessful in snaring Small Business Administration’s Recovery Act program loans, a program representative says the number of participating lenders and loans is rising.

The SBA’s America’s Recovery Capital Loan Program can provide up to $35,000 for small businesses facing immediate financial hardship. Some SBA lenders will offer ARC loans as long as funding is available or until Sept. 30, 2010, whichever comes first.
As of Aug. 23, the SBA had approved guarantees on $52 million of the $336 million available in the program’s first nine weeks, said SBA spokesman Michael Stamler.

“So far, 520 lenders have made ARC loans, and the number is growing every week,” Stamler said.

These loans carry a 100 percent guaranty from the SBA to the lender and require no fees paid to SBA. Loan proceeds are provided over a six-month period and repayment of the principal is deferred for 12 months after the last disbursement of proceeds. Repayment can extend up to five years.

In the trucking community and outside the industry, applicants have reported trouble obtaining a loan or finding a participating lender.

Applicants apply under North American Industry Classification System codes to describe what work they do, not as owner-operator or independent contractor, Stamler said. “I can't tell you whether any truckers have had difficulty applying for a loan,” he said.

Small businesses in 399 industries in 48 states have been approved for ARC loans, he said.

“I have no way of knowing whether any owner-operators have been turned away by lenders because they weren't customers of that lender,” Stamler said. “It would not be surprising, though, as many lenders -- and all ARC loans are made by commercial lenders, and guaranteed by SBA -- have such a policy.”

The SBA requires a Data Universal Numbering System number to process applications for this program, which is a 9-digit identification number provided free by Dun & Bradstreet. The number is used to obtain the credit score required for loan processing.

Lenders that have made loans under the ARC program are listed here .

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