I've been asked about this program a lot lately, so I thought I'd blog about it. Thanks to the Obama administration, the Small Business Administration (SBA) is now offering a brand new deferred payment loan for small businesses struggling to keep their doors open. The loan program, expected to last through September 30, 2010 and called the ARC loan (America's Recovery Capital) works like this:
- A viable business that needs temporary financial assistance for working capital or employees gets $35,000
- The business does not have to pay on the loan's principal for a WHOLE year, while the SBA makes the business' interest payment to the bank on its behalf
- The loan is guaranteed 100% by the SBA (this is huge because they now guarantee 90%)
- The loan is interest free
- There are no SBA fees
- Repayment period is five years
- Proceeds can be used to pay on mortgage, unsecured lines of credit, credit card debt (as long as the debt was used for business purposes).
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2 comments:
Just curious, do you think I'll be eligible if I have only 1 year 3 months in business and no employees?
Thanks for leaving a comment. We'll find out soon who qualifies for this loan. Keep in mind though that usually, a "viable" business has shown a couple years of financial statements to track. However we cannot be certain yet of what standards the SBA is using. Stay tuned and I'll update you.
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