WASHINGTON D.C. - U.S. Congressman Dan Boren announced today many local small businesses may soon be eligible for interest-free loans under a new program created by the American Recovery and Reinvestment Act (ARRA), or stimulus package. The newly launched “America’s Recovery Capital” (ARC) program allows small firms to take out loans of $35,000 to pay down existing business debts. Borrowers pay no interest on the ARC loans and repayment does not begin for one year. The stimulus package was signed into law in February. Boren, the only member of Oklahoma’s Congressional Delegation to vote for the package, said the new loans are part of the ongoing effort to help rebuild the economy.
“There are many businesses throughout eastern Oklahoma that would be viable in the long term if they could just make it through this rough patch,” said Boren. “That’s why we created this initiative. It gives small business owners some breathing room they need, so they can pay their bills, retain employees and play their traditional role as the engine that drives our state and local economies.”
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.
Boren said that in addition to the ARC loan program, the stimulus contained other measures aimed at helping small firms access credit. For instance, the 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.
“Small businesses are our nation’s most reliable job creators, generating seven out of ten new jobs,” Boren said. “If our nation is going to lift itself out of this recession, we need small business growth to start again. The ARC loan program is one element in a wide array of initiatives in the Recovery Act aimed at giving small firms the tools they need to lead our nation back to prosperity.”
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
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