Help on way for ailing businesses
President Barack Obama’s economic recovery act offers hope for some struggling businesses out there.
Beginning June 15, the U.S. Small Business Administration (SBA) will fully guarantee loans to small businesses under the newly-created America’s Recovery Capital (ARC).
These small business bridge loans of up to $35,000, are available to established, viable, for-profit small businesses that are experiencing hardships.
The ARC bridge loans have been created under the economic stimulus and recovery act. An attractive feature of these loans is the recipients do not pay SBA fees, and the loans are interest free with no payments until one year after the recipient receives the last of the funds.
After the initial 12-month grace period, the recipient will have five years to pay back the loan.
Another feature of the program is the loans will be made through commercial lenders, not the SBA directly.
The bridge loan funds can be used for payments towards principal and interest on existing business debt such as mortgages, revolving lines of credit, credit card debt, secured and unsecured debt, as well as to pay suppliers.
The key to becoming a recipient of these funds is that your business be “viable.”
In this case, viability is defined as a small business that has been profitable in the recent past, but which is beginning to struggle in the downed economy.
The viable business can project future profitability with the infusion of the ARC funds with deferred payments.
Since these loans are handled on the commercial banking level, you will need to contact your current bankers who should have additional information to help determine if you are qualified.
James A. Harmon, CPA, operates Harmon Accounting in Columbiana. He can be reached at 205-669-0059.
World-renowned orthopedic surgeon Larry Lemak is branching out his business, Lemak Sports Medicine and Orthopedics, into Shelby County with a... read more