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Small Business ARC Loan Arbitrage

The Recovery and Reinvestment Act of 2009 included some terrific financing opportunities for small businesses. The SBA ARC Loan Program [1] offers 0% loans to small businesses for up to five years.

The program caught my eye, because it looks like a fantastic arbitrage opportunity!

ARC Loan Program

The loan program offers loans to small businesses 100% backed by the small business administration. The idea is to help businesses experiencing hardship, which includes declining revenues; common for many small businesses right now. The loans are structured as follows:

Loan Terms. Loans up to $35,000, at 0% with no fees. No collateral is needed.

Repayment. The loan money is distributed over 6 months. Repayment begins one year after the last distribution and can last up to five years.

Time Frame. The loans will be offered until September 30, 2010. It will end sooner if all the funding is used before then.

ARC Loan Eligibility

To qualify for the ARC loan, businesses must meet the following criteria:

  • Show profits in one of the past three years.
  • Show cash flow projections for the next two years to meet loan payments.
  • Established business, in operation for at least two years.
  • Current on all debts, or no more than 60 days past due on any loan.


I’ve been a fan of using 0% balance transfers [2] for credit card arbitrage [3] for a long time. This is another opportunity to keep that arbitrage wheel spinning!

You’ll need some current business debts to qualify, which can include credit card obligations. Since we’ve used business cards to super-size our credit card arbitrage [4] in the past, we’ll have plenty of “business debt” to show.

Action Plan

Our business will hit the 2 year mark later this year, so I’m planning to submit an application. Because I’m taking time off this summer, I’ll have no problem showing a decrease in revenue!

What a fantastic way to convert some 0% balance transfer [2] money into five years at 0%!