Interest Free Small Business Loans

In June, the Small Business Administration announced America's Recovery Capital (ARC) Loan Program, a new plan intended to relieve pressure on existing small businesses that are having a hard time paying debts because of the recession.

The SBA usually guarantees only 85% of a small business loan, but in this case will guaranty 100% of the loan amount, making the lenders feel more secure about giving a hand up to struggling small business owners.

Fast Facts about the ARC small business loans:

Borrowers can receive up to $35,000.
The loans are entirely interest free for the borrowers.
The loans will be disbursed in six payments.
Payments can be used for mortgages, leases, lines of credit, leases, vendors, home equity loans used for business-related expenses, and for business cards.
No repayments are due until 12 months after the final disbursements.
Business owners have five years to repay the loans.

Qualifying businesses must be viable, i.e., they must provide financial statements for the previous two years showing they had at least one year of positive cash flow. They must also prove they've suffered declining sales or revenues, increasing expenses, cash shortages because of frozen inventory or receivables, accelerated debt or reduced or frozen credit lines, or difficult making payroll or meeting operating expenses.

In the current economic climate, millions of businesses probably meet the criteria, so there will be stiff competition for the loans. The SBA set aside $225 million to fund the ARC Loans, all of which will be used before September 2010.

As with all SBA small business loans, business owners have to meet the SBA's standard of an acceptable credit score, but given that the loans are intended for businesses that can't pay their bills, that threshold should be pretty low. Interested business owners must apply through a small business lender approved by the SBA.

To learn more about small business loans you can visit AmericaOneUnsecured.com. They have helped millions of consumers receive loans since 1999.