Arkansas Capital Corporation (ACC), 6 Bridges Capital Corporation (6BCC) and Arkansas Capital Relending Corporation (ACRC) are all focused on the economic development of our communities by providing access to alternative forms of capital for small to medium-sized businesses through distinctive and innovative lending products and services.
Arkansas Capital Corporation
For more than 50 years, referring banks and small business owners have benefited from Arkansas Capital Corporation’s traditional and non-traditional government-guaranteed lending opportunities. As a complement to conventional lending, Arkansas Capital Corporation works in partnership with banks to provide long term, true-amortizing, loans to small and medium-sized businesses which do not meet the requirements for traditional bank financing. Arkansas Capital Corporation’s mission allows for more flexible underwriting and, in many cases, includes multiple bank participations, SBA or USDA guarantees, flexible amortization and long-term payouts. Projects funded by Arkansas Capital Corporation and participating banks normally range from as little as $100,000 to $10,000,000.
As an SBA Preferred Lender and a USDA B&I lender, Arkansas Capital Corporation has a complete staff dedicated to developing, closing, and servicing government guaranteed loans. With Arkansas Capital Corporation as your lead lender, you no longer have to deal with the ever-changing government policies and procedures.
We’ve streamlined the process!
As one of Arkansas’ largest government guaranteed lenders, we have the experience it takes to “close your deal” and get your small business customer the financing they need in a prompt, efficient manner.
What’s in it for a Bank?
- It’s good for the local community with new jobs and lending opportunities;
- It’s good for bank stockholders – maximizes profits while minimizing risk;
- It’s good for bank depositors and customers – retains and expands new relations; and
- It’s good for bank employees – allows lenders to meet the needs of their customers.
The bottom line is that banks make money by participating with Arkansas Capital Corporation on government-guaranteed loans whether the guaranteed portion of the loan is sold in the secondary market or not. Additionally, the guaranteed portion of the loan does not count against the lender’s legal lending authority, thus empowering the smaller community and rural banks to generate larger size loans.
When is Government Guaranteed Lending Appropriate?
- When a small to medium-sized business needs a longer maturity than loan policy permits;
- When the requested loan exceeds either legal lending or policy limit;
- When liquidity depends upon selling the guaranteed portion in the secondary market;
- When the collateral does not meet loan policy requirements (i.e. uniqueness or value);
- When loan policy does not allow for new ventures in the applicant’s industry; and/or
- Any other factors relating to the credit that cannot be overcome except for the guaranty.
When is Government Guaranteed Lending not appropriate?
- When the applicant has a poor credit history;
- When a loan, to be refinanced, is already on reasonable terms; and/or
- When a loan, to be refinanced, has gone unpaid for more than 29 days within the past 36 months.
Why a Government Guaranteed Loan makes sense for a Borrower?
Government guaranteed loans are no longer the “loan of last resort.” Instead, in many cases, it is considered the best financing option available. Government guarantees provide small to medium-sized business owners with true-amortizing debt, which requires the removal of demand features and balloons equating to no re-negotiations during good or bad times. Additionally, government guarantees allow a lender to accommodate a business borrower with loan modifications, such as the release or substitution of collateral prior to the loan being paid off; deferments during difficult operating periods; and maturity extensions to accommodate your borrower’s cash flow needs.
Overall, government guaranteed loans through Arkansas Capital Corporation can prove to be a reliable source of new financing opportunities with small to medium-sized business customers while allowing a lender to enhance its portfolio with above-average profitability, absolute liquidity if necessary and a low-risk profile.
Six Bridges Capital Corporation
Along with owning your home, entrepreneurship has long been part of the American Dream, which is the belief that given constitutional freedom it is possible through hard work, courage, and imagination to achieve financial security. Six Bridges Capital Corporation too believes in the fundamental importance of entrepreneurship in order to maintain a vibrant, growing and sustainable economy within the State of Arkansas, the three Tennessee and four Mississippi counties of the Memphis Metropolitan Area and Bowie County of Texas, which includes the City of Texarkana.
Through Six Bridges Capital Corporation, the SBA 504 loan product provides banks with the opportunity to assist their small business clients with long-term, fixed rate, financing thereby enhancing local economic development through the creation of jobs available to their local residents.
Like its 7(a) loan product, the Small Business Administration’s (SBA) Certified Development Company (504) loan product makes long-term, fixed asset, financing available to the 5.7 million small businesses operating within the United States. While employing more than half of all private-sector workers, America’s small businesses generate 60 to 80 percent of all net new jobs each year. As a result, these small businesses (generally with fewer than 500 employees) assist in the revitalization of our inner-city neighborhoods and keep our rural communities strong with the creation of jobs and expansion of the tax base.
Referring to the product as “small businesses’ window onto Wall Street”, 504 provides local banks with a long-term, fixed rate, financing product for major fixed assets, such as owner-occupied real estate and long-term machinery and equipment. In other words, the 504 is a co-lending product where every loan is completed in collaboration with a private sector lender, such as a bank, and a nonprofit certified development company (CDC) such as Six Bridges Capital Corporation. Each of these parties makes a separate loan to the growing small business.
Typically, a 504 project includes a loan secured with a first lien from a bank covering up to 50 percent of the small business’ total project costs while a second loan covering up to 40 percent of the cost and secured with a second lien is funded by Six Bridges Capital Corporation. Between the two loans, a small business receives up to 90 percent financing of which 40 percent is at a fixed 10 or 20-year interest rate. In most cases, the small business contributes only 10 percent of its total project cost thereby conserving precious working capital for operations.
Expansion and start-up 504 projects range from $125,000 to $10,000,000 with loan proceeds used for fixed assets such as purchasing land and improvements, construction of new facilities or converting or renovating existing facilities, or purchasing long-term machinery and equipment. The 504 loan product cannot be used to fund working capital, inventory, or to refinance or consolidate existing debt.
SBA 504 loans are attractive to banks for a number of reasons. First, they enable banks to attach themselves to a loan product that provides long-term financing to their small business customers who would otherwise not be able to find the type of financing that would allow for the preservation of capital needed for long-term growth. Secondly, 504 loans provide risk management advantages to participating banks, such as limiting their credit exposure to a single customer, providing greater collateral coverage for their retained portion of the loan, and liquidity management through an active secondary market.
We in the United States are admired around the world for our entrepreneurial spirit and with 60 to 80 percent of net new employment opportunities created by high-spirited entrepreneurs each year, Six Bridges Capital Corporation, together with the Arkansas, Tennessee, Mississippi and Texas banking communities, will continue to be a catalyst for the development of an economic and entrepreneurial environment second to none in the United States.
Arkansas Capital Relending Corporation
Arkansas Capital Relending Corporation has a long history of leadership in USDA’s Intermediary Relending product. Under this product, loans can be extended to businesses located in communities with a population of 25,000 or less. In 2010, Arkansas Capital Relending Corporation was designated as a Community Development Financial Institution (CDFI) by the Department of Treasury. This designation will allow Arkansas Capital Relending Corporation to pursue federal grants and/or other low cost sources of capital.
Currently, Arkansas Capital Relending Corporation has a $1,000,000 grant request pending with the Department of Treasury under the CDFI product. If the grant request is successful, the capital will be deployed to businesses located in underserved markets across the State of Arkansas.