Zions First National Bank, a subsidiary of Zions Bancorporation, was the first financial institution in the nation to receive authorization by the U.S. Small Business Administration (SBA) to extend a new America’s Recovery Capital (ARC) loan to a small business client. Zions Bank received approval of an ARC loan application from the SBA on June 15, 2009, the day SBA began offering these loans that provide an immediate infusion of capital to small businesses to assist with making payments of principal and interest on existing debt.
As of mid-August, Zions Bank approved nearly 81 percent of all ARC loans in Utah and Idaho to date. Of 116 ARC loans authorized in Utah and Idaho, 95 were approved through Zions Bank. Due in part to Zions Bank’s ARC loan volume, Utah ranks third in the nation for the number of ARC loans made to businesses, behind Wisconsin and Minnesota, respectively.
“The ARC loan I received from Zions Bank will help give me the cushion my business needs during the current housing slump,” said Matt Pearson, owner of Aspen Countertops, based in Murray, Utah. “Now, I can focus on generating new clients.”
Additionally, Zions Bank ranked as the nation’s seventh largest provider of all SBA loans in a third quarter report of the SBA’s 2009 fiscal year. As of June 30, 2009, Zions Bank had approved 664 loans totaling $54.2 million, ranking only behind several large national banks.
Zions Bank senior vice presidents Lori Chillingworth and Cece Mitchell were both invited by the SBA to be part of a focus group of financial institutions to help develop the ARC loan program. The result is an attractive loan product that provides the critical capital to support businesses that are working hard to make it through tough economic times. ARC loans are interest-free to the borrower and have no SBA fees associated with them. The deferred-payment loans of up to $35,000 are for qualifying for-profit small businesses that are established and viable, but need short-term help to make their principal and interest payments on existing qualifying debt.
As part of the Recovery Act, the SBA’s ARC program was created as a no-interest, deferred payment loan to help small businesses that have a history of good performance, but as a result of the tough economy, are struggling to make debt payments. ARC loans allow borrowers to redirect cash flow from making loan payments to investing in their businesses, to help sustain the business and retain jobs. For example, making loan payments on existing loans with proceeds from an ARC loan can allow a business to focus more funds on core operations, such as buying inventory or making payroll.
Zions Bank President and CEO Scott Anderson believes ARC loans can help businesses like Innovative Excavation continue to grow and support its employees, helping to fuel the economy.
“Our institution-wide support for small businesses is not only reflected in our ranking as a top SBA lender in Utah for 15 years and in Idaho for the past seven years. Since we became involved in the development of ARC loans and were the first bank in the country to close an ARC loan, we have launched an extensive training effort for loan officers to become experts in this valuable program that could help so many entrepreneurs during this challenging economic environment,” said Anderson.
ARC loans will be offered by SBA lenders like Zions Bank for as long as funding is available or until September 30, 2010, whichever comes first.
Source: Press Release, dated 17 August 2009.
Image from HikingArtist.com used under Creative Commons License BY-NC-SA 2.0
do you do sba Arc loans in Colorado ?