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SBA Launches ARC Loan Program to Help Struggling Businesses

May 2009

On June 15, 2009, the Small Business Administration (SBA) will begin to issue 100% guarantees on America's Recovery Capital (ARC) loans of up to $35,000 to provide short-term help for struggling small business owners to make their principal and interest payments on existing qualifying debt.

ARC loans will be interest-free to the borrower, 100% guaranteed by the SBA, and have no SBA fees associated with them. The loans are deferred-payment loans and will be available to established, viable, for-profit small businesses with a good performance history.

ARC loans will be made by commercial lenders, not the SBA directly. They 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 don't have to pay interest on ARC loans. After the 12-month deferral period, borrowers will pay back the loan principal over a five-year period. Each small business will be limited to one ARC loan.

“These ARC loans can provide the critical capital and support many small businesses need to make it through these tough economic times,” said SBA Administrator Karen Mills. “Together with other provisions of the American Recovery and Reinvestment Act of 2009 (ARRA), 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.”

For more information on ARC loans, visit www.sba.gov.

For more information on the FFCFC 504 loan program, visit www.ffcfc.com, call 888.320.5504 or email us at insider@ffcfc.com.