WASHINGTON
-Small businesses suffering financial hardship as a result of the slow economy
may be eligible to receive temporary relief to keep their doors open and get their
cash flow back on track through to a new loan program announced today by SBA Administrator
Karen G. Mills.
Beginning on June 15, SBA will start guaranteeing
America’s Recovery Capital (ARC) loans. ARC loans are deferred-payment loans
of up to $35,000 available to established, viable, for-profit small businesses
that need short-term help to make their principal and interest payments on existing
qualifying debt. ARC loans are interest-free to the borrower, 100 percent guaranteed
by the SBA, and have no SBA fees associated with them.
“These
ARC loans can provide the critical capital and support many small businesses need
to make it through these tough economic times,” said Administrator Mills.
“Together with other provisions of the Recovery Act, ARC loans will free
up capital and put more money in the hands of small business owners when they
need it the most. This will help viable small businesses continue to grow and
thrive and create new jobs in communities across the country.”
“It’s
my firm belief that we will soon see better days ahead with these Recovery Act
tools including this highly anticipated deferred-payment loan that can now aid
small business owners confronting these dynamic conditions,” said Alberto
G. Alvarado, Los Angeles SBA District Director.
As part
of the Recovery Act, the ARC program was created as a no-interest, deferred payment
loan to help small businesses that have a history of good performance, but as
a result of the tough economy, are struggling to make debt payments.
ARC
loans will be disbursed within a period of up to six months and will provide funds
to be used for payments of principal and interest for existing, qualifying small
business debt including mortgages, term and revolving lines of credit, capital
leases, credit card obligations and notes payable to vendors, suppliers and utilities.
Repayment will not begin until 12 months after the final disbursement. Borrowers
don’t have to pay interest on ARC loans. After the 12-month deferral period,
borrowers will pay back the loan principal over a period of five years.
ARC
loans will be made by commercial lenders, not SBA directly. For more information
on ARC loans, visit www.sba.gov
