getting well-deserved recognition, and the Small Business Administration has announced a new emergency loan program to help qualifying businesses pay down existing debt.
In a speech Monday, SBA head Karen Mills announced that the agency would back loans of up to $35,000 administered through the America's Recovery Capital (ARC) program, which was authorized in February'sAmerican Recovery and Reinvestment Act (stimulus bill). The program's purpose is to assist businesses with good track records facing "immediate financial hardship." Business owners would have five years to repay the loan, with the first payment not due for 12 months.
Challenges lie ahead. ARC loans are "risky" (in the event of a default, the SBA must pay off the entire loan) and business owners still need to apply directly with the nation's banks--50 percent of whom are not partnering with the agency.
Mills, however, remains hopeful. According to reports of the event, she told the crowd, "I have started to think of the SBA not just as a backbone for small business, but as an entire bone structure."
Banks will receive detailed guidelines from the SBA by June 8. Applications for ARC will be accepted beginning June 15.