June 15, 2009 (Washington D.C.) – Many local small businesses will soon be eligible for interest-free loans under a new program created by the American Recovery and Reinvestment Act (ARRA), Congressman Bob Filner (D-San Diego) announced today.
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 loan program was established through the American Recovery & Reinvestment Act (ARRA), which the President signed into law in February. Rep. Filner said the new loans are part of Democrats’ ongoing work to help rebuild the economy.
“There are many businesses throughout San Diego and Imperial Counties that would be viable in the long term if they could just make it through this rough patch,” said Rep. Filner. “That’s why we created this initiative. The ARC program gives entrepreneurs the breathing room they need, so they can pay their bills, retain employees and play their traditional role as job creators in our economic recovery.”
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 viable by the Small Business Administration (SBA). 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.
Rep. Filner said that in addition to the ARC loan program, the ARRA contained 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.
“Small businesses are our nation’s most reliable job creators, generating seven out of ten new jobs,” Rep. Filner said. “If our nation is going to lift itself out of this recession, we need entrepreneurs to start growing again. The ARC loan program is one element in a whole series 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 online at: http://www.sba.gov/recovery/arcloanprogram/index.html
Local representatives split votes on the American Recovery & Reinvestment Act, with Congressional members Filner and Susan Davis (D-San Diego) voting for the measure, while Republican representatives Brian Bilbray, Duncan Hunter, and Darrell Issa voted against it.