Feds have new small business lending program

Washington — Local small businesses across northeast and central Pennsylvania may soon be eligible for interest-free loans under a new program created by the American Recovery and Reinvestment Act (ARRA), Rep. Chris Carney said the newly launched “America’s Recovery Capital” (ARC) program allows small firms to pay down existing business debts without overburdening the firms with interest payments and other costs. Borrowers pay no interest on the ARC loans and repayment does not begin for one year. Rep. Carney said the new program is part of Congress’ ongoing work to help rebuild the economy. “Many of our small businesses throughout northeastern and central Pennsylvania are important and viable parts of our communities in the long term if they could just make it through this rough patch,” said Rep. Carney. “That’s why we created this initiative. The ARC program gives entrepreneurs the breathing room they need, so they can pay their bills, retain employees and play their traditional role as job creators in our economic recovery.” To qualify for the ARC loans, small firms 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. Rep. Carney said that in addition to the ARC loan program, the ARRA contained other measures aimed at helping small firms access credit. For instance, the new law increases the percentage of a loan that the SBA can guarantee, makes SBA-backed loans more affordable and provides tools to unfreeze the small business credit markets, 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 http://www.sba.gov/recovery/arcloanprogram/index.html.