Cash for Clunker Businesses

Like cars, many small businesses out there are clunkers—cash guzzling, severely damaged by the recession. Now, the government is looking to bail out these business owners, as it did for car owners. If you have a venture that’s a bit of a stinker, you might benefit from the America’s Recovery Capital program, or ARC, which offers up to $35,000 to save your business.

Just like Cash for Clunkers, which ended this week, ARC a deadline. But don’t sweat it too much. ARC is set to end either September 2010 or when its $235 million budget runs out, “whichever comes first,“ according to the Small Business Administration. But only about 1,000 ARC loans have been approved since mid June, new lending data released this month shows. That’s well below the 10,000 loans the SBA says its budget can support.

To reach that target, the agency will have to get far more lenders on board. Of more than 8,000 FDIC-backed banks out there, only 400 have made loans to small businesses under ARC—mostly in the nation‘s heartland. Just three of the agency’s top 10 small-business lenders, Wells Fargo, PNC Financial and Zions Bank, are administering the $35,000 interest-free loans to “viable” small businesses struggling with debts as a result of the downturn. (By “viable,” the SBA means businesses that were in good shape before the crash.)…