SBA ARC Loans Coming On June 15

It's not a lot of money. And it is only a deferment of payment, not a grant. But the ARC loans will help some.

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.”

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