To curb 2007's financial meltdown, the US government enacted unprecedented bailout packages to some of America's largest corporations. However, to many critics of the massive bailouts, too many other businesses were left in the cold. Considering that small businesses make up a tremendous percentage of employers in the US, shouldn't they be eligible for assistance as well?
With this in mind, the US government now wants your small business to survive the economic crunch, and to help, it is offering short-term business loans with no interest. What type of small business loan offers no interest? It's the new America's Recovery Capital (ARC) loan program passed through the American Recovery and Reinvestment Act of 2009.
What is the New ARC Loan?
The economic recovery legislation gave the Small Business Administration (SBA) the power to guarantee short-term business loans and pay the interest to lenders. This is all part of the stimulus bill to help revive the American economy and to help keep businesses viable. With this new loan program, the mega-corporations are not the only ones eligible for government bailout, and small business can use government money to pay debtors.
These short-term business loans are available only once to a small business, and the loans are up to a maximum of $35,000. The loans are available for up to six months of disbursement, and interest is deferred for 12 months. That means you don't have a pay a cent for a year after the loan has been disbursed, and you can take up to five years to repay the loan while the SBA pays the interest to lenders.
How Can the ARC Loan Be Used?
The ARC Loan is designed to help small businesses continue to pay their debts and avoid bankruptcy. Only small businesses facing immediate financial hardship are eligible for this interest-free small business loan. Small business owners can use the ARC Loan to get temporary relief from cash flow problems and pay debts while keeping the business operating.
How Can I Benefit From an Interest-Free ARC Loan?
If you are a small business owner facing serious financial hardship, don't close your doors and file bankruptcy just yet. You can easily apply for this short-term business loan through a streamlined SBA application process.
If approved by a qualified lender, you can access interest-free cash to pay your existing debt, including business loans, credit cards, and other lines of credit. You get the benefit of keeping your own cash to put back into your business, helping to create jobs and improve cash flow. And the best feature is that you do not pay interest anytime during the 12-month deferment period, or the 5-year payback period.
Where do I Apply for an Interest-Free ARC Loan?
Only SBA-approved lenders are eligible to grant the new ARC Loan from the SBA. However, a non-SBA bank can become ARC lenders. Check with your bank to see if they are eligible, or contact the SBA to obtain a list of approved lenders. You can find more information at the SBA website.