New Loan Program to Help Small Businesses

June 15, 2009, WASHINGTON, D.C. – To help weather the current economic downturn, starting today (June 15), small businesses can begin applying for loans from a new program in the U.S. Small Business Administration (SBA).  The SBA’s “America’s Recovery Capital” (ARC) program will provide eligible small businesses with no-interest loans of up to $35,000 to help pay down existing debts.

“Small businesses are the backbone of Tennessee’s economy,” said Congressman Bart Gordon.  “More than 95% of our state’s private workforce is employed by small businesses – keeping them afloat is essential.”

Small businesses experiencing financial difficulty directly related to the current economic downturn, but deemed capable of long-term success by the SBA, will be eligible for the new loan guarantees.  Qualifying small businesses can use the loan for payment of principle and interest on existing debt like credit card obligations, mortgages, lines of credit, and balances due to suppliers, vendors, and utilities.

“This is a tough time for small businesses in Tennessee and throughout our country,” added Gordon.  “This loan program will provide much needed assistance to businesses struggling to make ends meet.”

Borrowers who receive the ARC loans will not have to begin repayment for one year.  The program was created by the American Recovery and Reinvestment Act, which was signed into law in February.

The new loan program is just one of the recent measures aimed at helping small businesses get through the economic recession.  The American Recovery and Reinvestment Act also increased the percentage of a loan that the SBA can guarantee, made SBA-backed loans more affordable and has provided tools to help unfreeze the credit markets.

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.  Additional information about the ARC loan program is available by calling (866)-947-8081 or by visiting http://www.sba.gov/recovery/arcloanprogram/index.html.