Congresswoman Chellie Pingree Announces New Small Businesses Lending Program

Press Release

Congresswoman Chellie Pingree Announces New Small Businesses Lending Program

Many local small businesses may soon be eligible for interest-free loans under a new program created by the American Recovery and Reinvestment Act (ARRA), Congresswoman Chellie Pingree announced today. Starting today, the "America's Recovery Capital" (ARC) program allows small firms to take out loans of $35,000 to pay down existing business debts. Borrowers pay no interest on the ARC loans and repayment does not begin for one year. The loan program was established through the Recovery Act, which the President signed into law in February.

"There are many businesses throughout Maine that would be viable in the long term if they could just make it through this rough patch," Pingree said. "That's why we created this initiative. The ARC program gives businesses the breathing room they need, so they can pay their bills, retain employees and play their traditional role as job creators in our economic recovery."

To qualify for the ARC loans, small companies must demonstrate they are experiencing immediate financial hardship due to the economic downturn, but are otherwise deemed by the Small Business Administration (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. Pingree said that in addition to the ARC loan program, the Recovery Act contained other measures aimed at helping small firms access credit. For instance, the new law increases the percentage of a loan that the SBA can guarantee, makes SBA-backed loans more affordable and provides tools to unfreeze the small business credit markets, helping small companies access capital at affordable rates.

"Small businesses are Maine's most reliable job creators, generating seven out of ten new jobs," Pingree said. "If our nation is going to lift itself out of this recession, we need entrepreneurs to start growing again. The ARC loan program is one element in a whole series of initiatives in the Recovery Act aimed at giving small firms the tools they need to lead our nation back to prosperity."

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.

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