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SBA launches program to assist struggling small businesses

Small businesses, including real estate brokerages, suffering financial hardship as a result of the slow economy may be eligible to receive temporary relief to keep their doors open and get their cash flow back on track through to a new loan program from the federal government’s Small Business Administration (SBA).

Beginning June 15, the SBA will start guaranteeing America’s Recovery Capital (ARC) deferred-payment loans of up to $35,000. The loans will be available to established, viable, for-profit small businesses, as defined, that need short-term help to make their principal and interest payments on existing qualifying debt. ARC loans are interest free to the borrower, 100 percent guaranteed by the SBA, and have no SBA fees associated with them.

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. Borrowers don’t have to pay interest on ARC loans. After the 12-month deferral period, borrowers will pay back the loan principal over a period of five years.