Local businesses may wish to take advantage of a loan program being offered by the Small Business Administration (SBA) as part of the federal government’s Recovery Act Programs.
As of June 15, the SBA is ready to accept loan packages from lenders.The Recovery Act called for a new temporary program – America’s Recovery Capital (ARC). ARC loans are designed to provide some temporary relief for viable small businesses with immediate financial hardship to keep their doors open until they can get back on track.
Here are some details:
• These short-term loans of up to $35,000 can be used to make up to six months of principal and interest payments on qualifying loans for existing viable for-profit small businesses in the United States.
• Debt may include secured and unsecured conventional loans (mortgages, term and revolving lines of credit); capital leases; notes payable to vendors/suppliers/utilities; Development Company Loan Program (504) first mortgage loans; Credit card obligations; Loans made with an SBA guaranty after Feb. 17, 2009.
• Loans have no SBA fees or interest costs for the borrower and are 100 percent guaranteed by the SBA.
• Loans will be disbursed within a period of six months, followed by 12 months of no repayment, and then five years to pay it back.
• ARC loans are for viable businesses, meaning that the business must have an established history of good performance, but are in a situation where they need extra help to bridge the “troubled waters.”
• Guaranteed interest: SBA will pay monthly interest to lender at reasonable rates throughout the term of the loan.
• By June 8, SBA expects to release detailed guidance for lender training.
• SBA does not expect to be in a position to accept loan packages from
lenders until June 15.
• Businesses may contact their local lenders for more information.