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A new loan program that could help small businesses across the Capital Region is being made available starting today, announced U. S. Rep. Paul Tonko (NY-21). The new “America’s Recovery Capital” (ARC) program offers interest-free deferred payment loans of up to $35,000 to help small firms pay down existing debts.  The ARC program was created by the American Recovery and Reinvestment Act.

“Small businesses are critically important to our local economy because they create jobs and pump dollars back into our communities,” said Rep. Tonko. “The ARC program was created to give small businesses the breathing room they need through loans that will help owners pay bills, make payroll, and retain employees. Providing this support to our small businesses is a key strategy to lifting the economy out of this recession.”

The ARC program offers interest-free loans to established, for-profit small businesses that can demonstrate they are experiencing financial hardship due to the economic downtown, but are otherwise deemed to be viable by the Small Business Administration. The start of repayment is deferred for one year. The loans will be made by commercial lenders and can be used for payments of principal and interest for existing, qualifying small business debts such as credit cards, mortgages, lines of credit, and balances due to suppliers, vendors and utilities.

In addition to the ARC loan program, the ARRA includes 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

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