Help is on the way for small business owners struggling to make debt payments.
Starting June 15, the Small Business Administration (SBA) will start guaranteeing America’s Recovery Capital (ARC) loans.
These are deferred-payment loans of up to $35,000 that will be made available to established, viable, for-profit small businesses in need of short-term help to make their principal and interest payments on existing debt. The loans are interest free and 100 percent backed 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,” SBA Administrator Karen G. Mills said.
Repayment will not begin until 12 months after the final disbursement. After the 12-moth period, borrowers will pay back the loan principal over a period of five years. Commercial lenders and not the SBA will make the loans available.