Entrepreneurs—Did you know about this new 100 percent guaranteed loan?
Many small businesses may be eligible to get temporary relief to keep their businesses going.
As of a month ago, the SBA will guarantee ARC loans. These are deferred-payment loans of up to $35,000. They are used to make the principal and interest payments on existing qualified loans.
These loans are interest-free to the borrower, guaranteed by the SBA and have no SBA fees. The SBA says the loans are to help small businesses that have a history of good performance but are struggling do to the current economy.
ARC loans will be disbursed within a period of up to six months and will provide funds to be used for payments of principal and interest for existing, qualifying small business debt including mortgages, term and revolving lines of credit, capital leases, credit card obligations and notes payable to vendors, suppliers and utilities. Repayment will not begin until 12 months after the final disbursement. After the 12-month deferral period, borrowers will pay back the loan principal over a period of five years.
Note that ARC loans will be made by commercial lenders, not SBA directly. For more information on ARC loans, visit www.sba.gov.