Could your Loan Department manager sell an SBA loan product that is interest-free to the borrower, has deferred payments for 12 months, and has no SBA fees associated with them? What if the loan has a five-year payback . . . remember we are talking zero interest here. What if I told you that the loan is 100% guaranteed by the SBA - AND the SBA pays the credit union Prime plus 2% on behalf of the borrower? You'd say "it sounds too good to be true", yes? Oh, but you have wandered into Obama Land where life is wonderful all the time.
It's called America's Recovery Capital (ARC) Loan Program. The ARC loan, which began in June 2009, is meant to help small businesses pay on existing debt and provide temporary financial relief so they can keep their doors open. There is a maximum loan amount of $35,000. What's more . . . non-SBA lenders can become ARC lenders. True story.
This is an excellent time to dip your toe into the business loan ocean. Even if ARC loans are the only business loans you ever make, it's hard to argue that this isn't a product your credit union should seriously consider offering. Not just offer, but SELL! Better hurry, the program runs out in September, 2010 or until funding runs out, which ever comes first.
You can find your nearest SBA district office at www.sba.gov/localresources/index.html.
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