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Arkansas Credit Reserve (AR Cash) Program
 

ADFA promotes economic development in the state by providing access to low-cost financing and increased access to loans.

ARKANSAS CREDIT RESERVE (ACR) Program

The ACR program encourages financial institutions to make loans to small businesses that fall just outside their conventional underwriting standards. ACR is a form of loan portfolio insurance that provides up to 100% coverage on certain loan charge offs. As more loans that are made through the program, the protection afforded to the lender increases. ACR is not allocated or segregated in any way for the benefit of any one loan. The entire reserve fund can be used to help cover any losses with a particular loan(s).

PARTICIPATING LENDERS

Most types of lending institutions are eligible to participate in ACR. ACR lenders underwrite their own loans and minimal paperwork is required. Arkansas financial institutions interested in being a part of ACR should visit ADFA’s web site, fill out an application, and e-mail, mail or fax it to ADFA.

• ADFA sets up a loan loss reserve account for each participating financial institution wherever the institution wants, whether in their bank or at another.

• ADFA makes a contribution to the loss reserve account with each enrolled loan.

• The loan loss reserve is used to cover
charged off loans when a claim is requested.

LOANS FOR SMALL BUSINESSES

• Minimum loan amount is $4,000.

• Primary business must be located in Arkansas

• Most small businesses with paid employees qualify

HOW IT WORKS

• Small business owners who cannot obtain financing through conventional methods may qualify for an ACR loan through an ACR lender. The borrower applies for a loan and is considered if the request meets the lending criteria established by the lending institution.

ARAKANSAS CREDIT RESERVE MATRIX OF FEES

Loan Amount: $2,000-$65,000
ACR Match: Fixed at 2,000
Borrower Fee: 1%

Loan Amount: $66,000 - $250,000
ACR Match: 3%
Borrower Fee: 1%

Loan Amount: $251,000 - $500,000
ACR Match: $7,500
Borrower Fee: 1%

COMPARISON OF THE ADFA MANAGED
LOAN LOSS RESERVE PROGRAMS

 

 

ACR

CAP

Eligible Uses: Small Business Loans Small Business Loans
Geographic  Area: Statewide Statewide
Maximum Loan: $500,000 No Max
Borrower Fee: 1% 1% - 6%
Lender Fee No Fee 1% - 6%
ADFA Fee $2,000 to $7,500 2 to 7 percent (matches combination of borrower and lender fee)
Funding Source: ADFA ADFA
Governing Document: Participation agreement & legislation Participation agreement & legislation

If you are interested in finding out more about this program, contact:

Bev Lambert - phone: 501-682-5912 or bev.lambert@adfa.arkansas.gov