May 18, 2009 — With the territory's economy in the doldrums like the rest of the nation, the U.S. Small Business Administration is offering to help business owners cope. The federal agency will guarantee 100 percent of no-interest America's Recovery Capital loans up to $35,000 made to local businesses by the territory's banks.
Word of the loans came Monday in an announcement by SBA V.I. Branch Manager Carl Christensen. The nationwide program starts June 15, but Christensen urged business owners to contact their banks before that date to get the loan process rolling. He said business owners have until Dec. 15 to apply.
"The beauty of this program is that repayment doesn't begin until 12 months after the final disbursement of the loan," Christensen said.
Borrowers then have five years to pay back the loan.
The loans can be used for a wide variety of purposes, Christensen said. They include payment of revolving lines of credit, mortgages, leases, credit cards, and vendor or supplier bills.
The SBA usually guarantees only 75 to 85 percent of loans instead of the 100 percent under the ARC program, he said.
Discussing the difficult economic times facing the territory's business owners, Christensen said he's heard of many businesses that are "just hanging on." This loan program is targeted at those businesses to help keep them afloat, he said.
In a news release from the agency, SBA Administrator Karen G. Mills said the loans are designed to offer temporary relief so businesses "can keep their doors open and get their cash flow back on track."
"These ARC loans can provide the critical capital and support many small businesses need to make it through these tough economic times," Mills said. "ARC loans will free up capital and put more money in the hands of small-business owners when they need it the most. This will help viable small businesses continue to grow and thrive and create new jobs in communities across the country."
As part of the American Recovery and Reinvestment Act — commonly referred to as stimulus funds — the ARC program was created as a no-interest, deferred-payment loan to help small businesses that have a history of good performance but, as a result of the tough economy, are struggling to make debt payments, the news release indicated.
Call Christensen at 778-5380 or visit the SBA website for more information on the ARC loans.
Back Talk Share your reaction to this news with other Source readers. Please include headline, your name and city and state/country or island where you reside.
