Small businesses suffering financial hardship as a result of the slow economy could be eligible to receive temporary relief through a new loan program announced this week by the Small Business Administration.
Beginning June 15, SBA will start guaranteeing America's Recovery Capital loans. ARC loans are deferred-payment loans of up to $35,000 available to established, viable, for-profit small businesses that need short-term help to make their principal and interest payments on existing qualifying debt.
ARC loans are interest-free to the borrower, 100 percent guaranteed by the SBA, and have no SBA fees associated with them.
Repayment on the loans will not begin until 12 months after the final disbursement, and 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 period of five years.