SBA director Karen Mills said the new American Recovery Capital (ARC) program will offer “viable” small businesses six-month loans of up to $35,000. She said best candidates are businesses who can show prior profitability while illustrating recent struggles due to the economy. She further stated the most typical use of these funds would be for businesses to pay existing principal and interest payments (the exception being for existing SBA loans).
The 100% SBA-backed loan is interest-free and must be used within six months. Borrowers have six years to repay. The program begins officially June 15 and will continue for as long as funding is available, or September 30, 2010, whichever comes first.