Washington, D.C. - U.S. Rep. Brian Baird said that many Southwest Washington businesses will soon be eligible for interest-free loans under a new program created by the American Recovery and Reinvestment Act (ARRA). The newly launched "America's Recovery Capital" (ARC) program allows small firms to take out loans of $35,000 to pay down existing business debts. Borrowers pay no interest on the ARC loans and repayment does not begin for one year.
"Small businesses are the backbone of our economy in Southwest Washington, and many of them are struggling to survive this economic crisis," Baird said. "With many of our counties experiencing double digit employment this program will help save jobs by providing local businesses the resources they need to stay afloat."
To qualify for the ARC loans, small businesses must demonstrate they are experiencing immediate financial hardship due to the economic downturn, but are otherwise deemed by the Small Business Administration (SBA) to be viable. The loans will be made by commercial lenders and can be used for payments of principal and interest for existing, qualifying small business debts like credit card obligations, mortgages, lines of credit, and balances due to suppliers, vendors, and utilities.
In addition to the ARC loan program, the Recovery Act contains other measures aimed at helping small firms access credit. For example, the ARRA increases the percentage of a loan that the SBA can guarantee, and makes SBA-backed loans more affordable. It also provides tools to unfreeze the small business credit markets, thereby helping small companies access capital at affordable rates.
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 at (www.sba.gov/recovery/arcloanprogram/index.html).