Kurt's Work

Oregon small businesses may be eligible for interest-free loans under a new program created by the American Recovery and Reinvestment Act (ARRA), announced by Congressman Kurt Schrader (D-OR) today.  The newly launched “America’s Recovery Capital” (ARC) program will allow small businesses to take interest free loans of $35,000 to reduce their debt.

“As a small business owner I understand how crippling debt can be for small companies,” said Schrader. “In this economy, lenders are reluctant to loan to our small businesses. The ARC program provides small businesses with the flexibility they need to, pay their bills, retain employees and serve as job creators in our economic recovery.”

Under the plan borrowers would pay no interest on the ARC loans and would not have to begin repayment for one year. These loans are also 100% guaranteed by the Small Business Administration (SBA) which should make banks more likely to lend the money. To qualify for the ARC loans, small businesses must demonstrate that they are experiencing immediate financial hardship due to the economic downturn, but are otherwise deemed by the SBA to be viable.  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. 

In addition to the ARC program, the recovery act included several other provisions designed to increase access to credit for small businesses. The ARRA allows the SBA to guarantee up to 90% of individual business loans, freeing up more credit for small businesses. It also makes SBA-backed loans more affordable by eliminating fees and provides tools to unfreeze the small business credit markets, helping small firms to access capital at affordable rates.
 
“98% of Oregon businesses are small businesses and they employ 57% of working Oregonians,” said Schrader. “Increased capital means jobs for Oregon families during these difficult times. As chairman of the finance and tax subcommittee on small business I will continue to push for more access to loans and capital to help our businesses weather this tough economic environment.” 

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 at http://www.sba.gov/recovery/arcloanprogram/index.html.

Interested businesses can also contact Congressman Schrader’s office at 1-877-301 KURT (5878) with questions.