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U.S. Small Business Administration
-- News Release --
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Release Date: May 18, 2009
Contact: David J. Hall (202) 205-6697
Release Number: 09-30
Internet Address: http://www.sba.gov/news
SBA Launches New 100-Percent Guarantee ARC Loan Program
To Help Struggling Businesses
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."
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-moth 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
