SBA Launches New 100-Percent Guarantee ARC Loan Program To Help Struggling Businesses

"MRAA has been notified of some very positive news that will possibly help many of you in the very near future – a loan program from the Small Business Administration", said Phil Keeter, President of MRAA.

WASHINGTON – Small businesses suffering financial hardship as a result of the slow economy may be eligible to receive temporary relief to keep their doors open and get their cash flow back on track through to a new loan program announced today by SBA Administrator Karen G. Mills.

Beginning on June 15, SBA will start guaranteeing America's Recovery Capital (ARC) loans. ARC loans are deferred-payment loans of up to $35,000 available to established, viable, for-profit small businesses that need short-term help to make their principal and interest payments on existing qualifying debt. ARC loans are interest-free to the borrower, 100 percent guaranteed by the SBA, and have no SBA fees associated with them.

"These ARC loans can provide the critical capital and support many small businesses need to make it through these tough economic times," said Administrator Mills. "Together with other provisions of the Recovery Act, ARC loans will free up capital and put more money in the hands of small business owners when they need it the most. This will help viable small businesses continue to grow and thrive and create new jobs in communities across the country."

As part of the Recovery Act, the 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 will be disbursed within a period of up to six months and will provide funds to 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 will not begin until 12 months after the final disbursement. Borrowers don't have to pay interest on ARC loans. After the 12-moth deferral period, borrowers will pay back the loan principal over a period of five years.

ARC loans will be made by commercial lenders, not SBA directly. For more information on ARC loans, visit www.sba.gov

Recently, a lot of discussions among retailers have been centered around a great concern about floor plan financing for new and pre-owned boats. Over the past six months MRAA has been working with key trade associations and the federal government to learn about government sponsored programs and their potential application to floor planning to help alleviate the tremendous concern on our membership. One of the major programs that would have a direct application to boat dealers is the Small Business Administration's 7 (a) loan program.

Once the word about the SBA 7 (a) loans got to the marketplace, MRAA has heard many inquiries about the program and how it would apply to boat retailers. Working with the NMMA and the National Marine Bankers Association, we are now ready to distribute a FACT SHEET, which we believe addresses many of the questions we have heard.

Please review the Fact Sheet. The program may help your business during these tight credit times. For more information, please contact the SBA at 800-827-5722 or go to the web-site of the National Association of Guaranteed Government Lenders, www.naggl.org

Phil Keeter, MRAA President

MRAA says President Barack Obama is now considering extending loans usually reserved for small businesses to dealers, making it easier for them to borrow money to acquire new and used boats. The SBA had placed a moratorium on using federal funds for floor planning.

During a two day period preceding the industry American Boating Congress in Washington, D.C, Phil Keeter, MRAA President, and Larry Innis, MRAA Washington Representative, met with key employees of the National Automobile Dealers Association, the National Association of Development Companies, and the Small Business Administration. NMMA and the National Marine Bankers Association joined for the meeting with the SBA. Mr. Keeter had met earlier with the National Association of Guaranteed Government Loans, which administers the SBA 7 (a) loan program for floor plan financing.

The purpose of the meetings was to discuss the need for federal assistance for boat dealer floor planning. The meeting with the SBA occurred immediately after a special meeting the SBA had in the White House to present the SBA plan for expansion of the 7 (a) loan program to floor planning at boat, car, and RV dealerships. The White House Office of Management and Budget is now considering the SBA proposal.

Time is now critical. According to the SBA, the White House wants to make a decision by June 1 to allow making SBA funds available for dealer floor planning.

It's easy. Go to www.whitehouse.gov and click on the "Contact Us" button, enter the required information and the following message:

Dear Mr. President. "The recreational boating industry and my business are suffering from a credit freeze and the inability to obtain floor financing of our products causing as many of 50% of our valued employees to be laid off from work. We understand the Small Business Administration has presented a proposal to OMB which would open the SBA 7 (a) loan program to floor plan financing for new and used boats. Support of this proposal is critical for the financial recovery of our industry. We are writing to ask for your support of the SBA proposal to open the 7 (a) loan program for floor plan financing. Thank you."

MDCE moves to Orlando with great expectations

Building on the success of the 2008 event, the Marine Dealer Conference & Expo (MDCE) is set for growth in 2009. With a move to Orlando, Fla., and plans to provide twice the educational content of last year, the MDCE expects growth in attendance and industry support as a result of the efforts of Boating Industry magazine and the Marine Retailers Association of America

As part of a five-year licensing agreement, Boating Industry magazine will be responsible for the overall creation and development of the annual dealer convention, working closely with the MRAA convention committee to deliver unsurpassed educational content, while also assuming all sponsorship sales and marketing efforts.

"This partnership will culminate in a must-attend event that — at long last — will bring the seemingly disparate segments of our industry together at just the right time," says Tammy Galvin, vice president, Affinity Media. "Let's face it: All segments of our industry have seen an incredible amount of attrition that is likely to continue. It's abundantly clear to us and the MRAA that the survivors will be those arming themselves with every conceivable best practice available, and that's precisely what we will deliver."