The U.S. Small Business Administration has announced a new emergency bridge-lending program geared toward helping struggling small businesses ride out the current recession.
Calling it another “tool to our toolbox” SBA head Karen Mills said the new American Recovery Capital (ARC) program will offer “viable” small businesses temporary six-month loans of up to $35,000.
“We expect these loans to be in high demand,” said Mills, who made the announcement as part of her keynote address at the National Small Business Week conference.
The interest-free loan must be used within six months and borrowers have up to six years to repay it. The only other stipulation is that it cannot be used to pay any previous SBA-backed loan the business may have outstanding.
The ARC program, effective June 15, is part of the larger Recovery Act that President Barack Obama legislated earlier this year. That bill earmarked $15.4 billion to purchase existing SBA-backed loans from banks to free up lenders to make more loans and stimulate the so-called “secondary” market that had stalled.
Photo by SBA.