Small Business Grants Vs ARC Loans

Small Business Grants Vs ARC Loans

Small businesses are an important part of the American economy. According to the National Federation of Independent Business (NFIB), they supply roughly 55 percent of all jobs in the private sector, and they generate about half of all privately generated Gross Domestic Products (GDP), according to some estimates. There are over 27 million small businesses in the United States. They can be self-employed, home-based, Internet-based, and owned by men, women, and minorities, producing a very broad range of innovative products and services. Yet they continue to struggle in securing financing to start or grow their businesses.

Small businesses have always relied on commercial banks for business loans. The increase in bank consolidations has resulted in larger banks, making it more difficult for the small business owner to secure funding for their business. Since more than 60% of small businesses rely on credit lines and loans, and the bulk of this financing comes from the banking sector, small businesses are increasingly looking for more sources to fund their businesses.

The good news is that there are many other sources available for small business owners, including government-backed loans, and grants. The major difference between the two is that loans need to be repaid; grants do not. However, the U.S. government, recognizing the important role that small businesses play in our national economy, recently announced the availability of interest-free ARC loans. Grants and ARC loans offer two additional sources for small business funding that are worth investigating.

Business Grants

Grants are not loans. Grants are free money that does not have to be repaid. Government grants are offered only to local and state, educational, and public housing organizations, and non-profits, and do not apply to start-ups. In addition, the government may offer some specialized grants to companies engaged in environmental efforts like energy efficiency and recycling, as well as businesses that train youth and senior citizens on the latest technology. That's why they are referred to as "special purpose grants." So, where do other small businesses go for grant money?

Grants are available from local government agencies and private corporations and organizations. Some of the private sources include trusts and foundations such as the Gates Foundation, the Lilly Endowment, Ford Foundation, Hasbro Industries Charitable Trust, W. K. Kellogg Foundation, the Kipling Foundation, Clorox Company, Allstate Foundation, and International Paper Company. Each source has their guidelines on what type of business will qualify for grant money, and the business owner must meet the criteria. Grant money can be as small as $500 or as large as $5 million. The application process is long and tedious, requiring the applicant to present a solid business plan. The competition for grants is keen with no guarantee that the applicant will receive the money. But for small businesses who qualify and are willing to tough it out in order to get free money, it is worth it.

ARC Loans

Business loans in general differ from grants in that they need to be repaid, with interest. In addition, grants are based on the presentation of a well-written business plan, while loans are based on credit scores and often require collateral.

Recently, however, the U.S. government announced a new program of interest-free loans called ARC (America's Recovery Capital) loans, an extension of the 2009 Recovery Act, offered through the U.S. Small Business Administration (SBA). ARC loans provide up to $35,000 (one time only) of interest-free money specifically to small business owners to help them pay down debt on other loans. In essence, it buys them time to get back on their feet. The loans are available until September 30, 2010, or until the funds are depleted (only 10,000 loans are available), and are offered through SBA lenders only. SBA pays the fee to the lenders; the borrower pays back only the principal. Other specifics on ARC loans include:

* Only private, for-profit enterprises up to 500 employees are eligible; non-profits are not eligible 

* Business must be at least two years old 

* Business must demonstrate an immediate financial hardship 

* Loan money can only be used to pay off existing outstanding small business debt 

* Loan money is paid out to the borrower over a six month period 

* Repayment of the principal begins after the last loan disbursement is received 

* Borrower has up to five years to repay the loan principal

BusinessGrants.org (http://www.BusinessGrants.org) is a free online resource for details and FAQs about small business grants and other financing options.

Visit to - http://businessgrant-money.blogspot.com/

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The new ARC loans offer both advantages and disadvantages. The advantages include instant cash flow improvement, more money to re-invest in the business, and more time to restructure the business and position it for future success. For some small businesses, it is just what they need to survive. For others, the disadvantages include the strict criteria for qualification and use of ARC loan money. In addition, unlike grant money that does not have to be repaid, ARC loans need to be repaid. So, a small business owner who meets the qualifications must present a solid business plan that convinces the SBA lender they will be in a position to repay the loan within the time period allotted. That is the risk for the borrower, the lender, and the SBA who is guaranteeing the new ARC loans.

ARC loans are not for everyone. However, they may be just the solution needed to save some small business owners.

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How to Get Free Government Money Fast

How to Get Free Government Money Fast

We have heard about all the seemingly elusive free government money programs that re available to American taxpaying citizens each year, yet thousands of qualified individuals continue to neglect to apply year after year. There is an enormous amount of free unclaimed government money attainable by most American citizens over the age of eighteen, just waiting to be awarded.

It is probably a good assumption that as a generalization, people just don't believe they can get "free money". This is understandable considering that most things that appear too good to be true are indeed that. However, it is believed by many that it the particular terminology of the phrase that is detouring American taxpayers from pursuing these generous monetary opportunities. Perhaps if this "free money" was spoken of in it's more specific terms people would be more likely to take the theory seriously and actually obtain their share of the funds.

To be more specific, the free government money that is available is provided through government grant programs. State, federal, and government grants are cash awards distributed to American citizens for a vast array of reasonable purposes. This money if non repayable, non-taxable, and in many cases easily acquired. Free government money is not myth. It does exist. You just must be more specific in detail when looking to locate it.

Rather than searching for "free money to buy a home", try typing "government home grants". There is no doubt you will soon be filtering through a wide variety of real estate or first time homebuyer grants that, you guessed it, provide free government money to buy homes. Or if you are interested in paying off exorbitant credit card debts you may enter "federal debt relief grants" rather than "free money for credit cards".

You can find free unclaimed government money if you look hard enough, but searching for free government grants will get you where you are going a whole lot quicker. It is quite easy to doubt anything that is preceded by the word "free", but when it comes to government grants, there is no doubt about it. Free money does exist, and you're only a few clicks away from finding the right type for you.

See Available Government Grants and find out how much money you qualify to receive today. Never pay it back.

Visit to - http://businessgrant-money.blogspot.com/

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