CNNMoney.com:

An emergency loan program designed to shore up struggling-but-viable small businesses will open for applications in mid-June, the Small Business Administration announced Monday.

The news came during a speech by SBA head Karen Mills kicking off the SBA’s annual National Small Business Week program of publicity and networking activities.

Known as America’s Recovery Capital (ARC), the emergency loans were authorized in February’s stimulus bill.

The SBA has been working since then to pull together guidance for the new program, which will back short-term loans of up to $35,000 that business owners can use to temporarily cover their payments on existing debt.

No repayment on the ARC loans will be due for 12 months, and owners will have up to five years to repay them.

The SBA plans to release guidance to banks by June 8 and will be ready to accept lender loan packages by June 15.

Business owners will need to apply directly to banks for the loans, but the SBA will offer those banks a 100% guarantee on the ARC loans they make. If the business owner defaults, the SBA will pay off the loan.

Photo by slonecker.

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