SBA
News Release
PRESS OFFICE
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Release Date:
May 18, 2009
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Contact:
David J. Hall (202) 205-6697
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Release Number:
09-30
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Internet Address:
http://www.sba.gov/news
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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 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 do 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
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