Some temporary relief may be available for small businesses thanks to a new deferred-payment loan program now available through the Small Business Administration.
Beginning June 15, the SBA will start guaranteeing America’s Recovery Capital, or ARC, loans. The program offers deferred-payment loans of up to $35,000 available to viable small businesses that need short-term help to make their principal and interest payments on existing qualifying debt, according to the SBA.
The loans are interest-free and fee-free to the borrower, and 100 percent guaranteed by the SBA.
“These ARC loans can provide the critical capital and support many small businesses need to make it through these tough economic times,” said Karen Mills, SBA administrator. “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.”
It’s just the type of program local business leaders need most, said Chris Xeil Lyons, economic development specialist for the city of Hamilton.
“A lot of the businesses I talk to just need something to get by, they need to get some capital,” she said. “This will enable a lot of them to survive.”
For some, it could be the difference between going out of businesses and getting the three or four months needed to turn things around, said Bill Triick, president of the Chamber of Commerce Serving Middletown, Monroe and Trenton.
“I think for our small businesses, $35,000 would be a tremendous thing,” he said. “Not everyone needs it urgently, but we think this is a good thing and hope that our businesses will take advantage.”
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 that, borrowers will pay back the loan principal over a period of five years, according to the SBA
For more information on ARC loans, visit sba.gov.
