The Small Business Administration on June 15 will begin guaranteeing America’s Recovery Capital (ARC) interest-free loans to small businesses suffering financial hardship due to the economic recession. ARC loans are 100-percent-guaranteed 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.
The interest-free 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. 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.
“These ARC loans can provide the critical capital and support many small businesses need to make it through these tough economic times,” says SBA Administrator Karen 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.”
More information will be available at www.sba.gov.