Under the Joint Bonding Assistance Agreement, the SBA and Caltrans will help qualified small businesses obtain bonding required on Caltrans construction contracts and subcontracts. The SBA Surety Bond Guarantee program will cover between 70% and 90% of the cost incurred by the participating surety companies in the event of a contract default.
More information on the Surety Bond Guarantee program is available at sba.gov/osg.
The SBA is guaranteeing America’s Recovery Capital (ARC) loans to help struggling small businesses receive temporary relief from the slow economy. The agency also launched a pilot program to aid auto, recreational vehicle, boat and other dealerships.
The ARC program, which was launched June 15, guarantees deferred-payment loans of up to $35,000 to “established, viable, for-profit small businesses” that need short-term help making interest and principal payments on existing qualified debt, according to an SBA press release. ARC loans are interest-free, 100% guaranteed by the SBA, and have no SBA fees associated with them. The ARC program was created as part of the American Recovery and Reinvestment Act to help small businesses that have a history of good performance but are struggling to meet current debt obligations.
ARC loans will be disbursed over a period of up to six months. Funds can be used for payments of principal and interest for existing, qualifying small business debt including mortgages, term and revolving lines of credit, capital leases, credit card obligations and notes payable to vendors, suppliers and utilities. Repayment begins 12 months after the final disbursement. After the 12-month deferral period, borrowers will pay back the loan principal over five years.
The SBA also launched a pilot program July 1 that offers guaranteed loans to finance inventory for eligible auto, recreational vehicle, boat and other dealerships. Dealer Floor Plan (DFP) financing allows dealers to borrow against their inventory and repay the loan as they sell the inventory or borrow against the line of credit again to add new inventory.
The SBA is providing the loan guarantees for the DFP pilot program through its 7(a) program. DFP loans may only be made through SBA lenders for titled inventory, including autos, RVs, manufactured homes, boats and motorcycles. The pilot program is available until Sept. 30, 2010, when the SBA will make a determination of whether to extend the program.
DFP loan disbursements are for a minimum of $500,000 up to $2 million. The maximum repayment term is five years.
More information about the SBA’s loan programs is available at sba.gov.