6.17.2009

$35K, anyone?

Stimulus package provides interest-free loans to small businesses

Washington, DC – Today, U.S. Rep. Scott Murphy announced that local small businesses may soon be eligible for interest-free loans under a new program created by the American Recovery and Reinvestment Act (ARRA). The newly launched “America’s Recovery Capital” (ARC) program allows small businesses to take out loans of $35,000 to pay down existing business debts. Borrowers pay no interest on the ARC loans and repayment does not begin for one year.

The ARC loan program was established through the ARRA, which President Barack Obama signed into law in February. Congressman Murphy said the new loans are part of Congress’ ongoing work to help rebuild the economy.

“Small businesses are the backbone of our economy; it is imperative that we help them make it through these tough economic times,” Murphy said. “These loans will give our local entrepreneurs some breathing room as we work to turn our economy around. I strongly urge small businesses struggling to stay afloat to apply for an ARC loan as soon as possible.”

To qualify for the ARC loans, small firms must demonstrate they are experiencing immediate financial hardship due to the economic downturn, but are otherwise deemed by the Small Business Administration (SBA) to be viable. The loans will be made by commercial lenders and can be used for payments of principal and interest for existing, qualifying small business debts like credit card obligations, mortgages, lines of credit, and balances due to suppliers, vendors and utilities.

In addition to the ARC loan program, the ARRA contained other measures aimed at helping small firms access credit:
  • it increases the percentage of a loan that the SBA can guarantee
  • it makes SBA-backed loans more affordable
  • it provides tools to unfreeze the small business credit markets, helping small companies access capital at affordable rates .

To apply for ARC loans, businesses should visit their local SBA-approved small business lenders. The loans will be available through Sept. 30, 2010, or until appropriated funding runs out.
For more information, go to http://www.sba.gov/recovery/arcloanprogram/index.html

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