WASHINGTON — The U.S. Small Business Administration (SBA) has announced a new loan program designed for small businesses struggling in today’s difficult economy.
The America’s Recovery Capital (ARC) Loan Program can provide up to $35,000 in short-term relief for viable small businesses facing immediate financial hardship, helping these businesses ride out the current uncertain economic times and return to profitability, SBA says.
ARC loans can be used to make payments of principal and interest, in full or in part, on one or more existing, qualifying small-business loan for up to six months. This allows borrowers to redirect cash flow and invest in their businesses, helping sustain the business and retain jobs.
For example, making loan payments on existing loans with proceeds from an ARC loan can allow a business to focus more funds on core operations, such as buying inventory or making payroll.
ARC loans are interest-free to the borrower, carry a 100% guaranty from the SBA to the lender, and require no fees paid to SBA. Loan proceeds are provided over a six-month period and repayment of the ARC loan principal is deferred for 12 months after the last disbursement of the proceeds.
ARC loans are available to viable, for-profit small businesses in the United States that have qualifying small-business loans and are experiencing immediate financial hardship.
SBA lenders will offer ARC loans for as long as funding is available or until Sept. 30, 2010, whichever comes first.
For more information about applying for an SBA ARC loan, click here.