"What we're doing," Bangs said, "is providing them a means of making payments on existing debt obligations they have that they may be having trouble fulfilling right now because of financial hardships."
Danville Economic Development and Special Events Coordinator Jill Bergman said that while the town is not participating directly in the ARC program, it is holding information sessions for merchants, and the details of the ARC program will be disseminated to attendees.
Applicants can receive up to $35,000, which they can use solely for the purpose of making principal and interest payments on existing qualified loans. Bangs explained that such a loan would be a line of credit with a bank or other financial institution, a term loan or other debt incurred as a result of business.
ARC loans are deferred payment loans. After the six months of loan disbursement, the borrowers have one year where they don't have to make any loan payments at all. They then have five years to pay off the principal only.
Bangs said there are no set limits to how many loans can be made per geographic area, however they are limiting the number of loans a specific lender can make. Lenders are nationwide and through many institutions.
Any person interested in seeking a loan should contact the bank their business is working with to see if it is participating in the project. If the bank is not participating, then the person can contact the SBA to find another local institution that is taking part. Processing the loans can take up to 30 days.
Bangs said that the ARC loans are 100 percent guaranteed by the SBA and have no SBA fees associated with them.
The program is set to end Sept. 30, 2010. Bangs said it is possible that it could either be renewed or made permanent by congress.
"It could end prior to the sunset date if enough loans are made that it used up all the funds," he said. "However if the funds are not depleted by Dec. 31, 2009, it will continue on."
The ARC loans are expected to be helpful to Danville merchants, who are already getting some assistance from the town as part of their own stimulus package.
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