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Business owners could get free loans

Small-business owners in Jackson County may qualify for interest-free loans
by Chris Gautz
Wednesday June 17, 2009

Small businesses strapped for cash and facing immediate financial hardship may be able to qualify for interest-free loans funded by the stimulus bill.

If the business is deemed viable by the Small Business Administration, it could be eligible for up to $35,000 to pay down existing debt. This would allow a business owner to reinvest in his or her company, rather than make loan payments.

“This program couldn’t come at a better time to help Michigan’s struggling small businesses,” U.S. Rep. Mark Schauer, D-Battle Creek, said in a statement. “These loans will help entrepreneurs cover operating expenses, retain employees and keep their doors open during this time of economic uncertainty.”

The new program called “America’s Recovery Capital” also allows businesses to pay no interest on the loans and gives owners one year before they have to repay them. They then have five years to repay the loan. It could take up to six months for the funds to be disbursed.

The loans can be used to make payments on principal and interest payments on credit cards, mortgages, lines of credit, and balances due to suppliers, vendors and utilities, according to Schauer’s office.

“It’s a way to catch your breath and get back on your feet,” said Zack Pohl, Schauer’s press secretary.

The loans are available until Sept. 30, unless funds run out before then.

They will be made by SBA-approved small-business lenders. Non-SBA-approved lenders can participate in the ARC program but must contact the local SBA district office.

The program will give banks that have been hesitant to lend to small businesses in this economic climate reduced risk and guaranteed interest on the loans, paid by the SBA.

“This should loosen things up,” said Roni Weaver, director of the Small Business & Technology Development Center of The Enterprise Group.

In the coming weeks, Schauer plans to host a series of workshops with small businesses to help them learn about the program and other avenues of assistance from the stimulus bill.

For more details about the loans, visit www.sba.gov/recovery/arcloanprogram/index.html.