Small businesses can apply for ARC loans

The U.S. Small Business Administration (SBA) announced that as of June 15 it will accept loan applications for a temporary new program called America's Recovery Capital (ARC).

Loans of up to $35,000 are designed to provide a bridge for viable small businesses with immediate financial hardship to keep their doors open until they get back on track.

"These ARC loans are another tool in the SBA toolkit which will provide critical support to small businesses struggling to make it through these tough economic times," Administrator Karen Mills said.

The deferred-payment loans are available to established, viable for-profit small businesses that need short-term help to make the principal and interest payments on existing and qualifying business debt. ARC loans are 100 percent guaranteed by the SBA with no fees.

The loans will be disbursed over a period of up to six months to provide funds to for payment 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. SBA will pay the interest on ARC loans to the lenders at the variable rate of Prime plus two percent.

Repayment will not begin until 12 months after the final disbursement. After the 12- month deferral period borrowers will pay back the loan principal over a period of five years.

For information, call (800) 827-5722 or go to sba.gov.