News From the
Committee on Small Business
Nydia M. Velázquez, Chairwoman

For Immediate Release                                                       CONTACT:  Alex Haurek; Duncan Neasham
June 15, 2009                                                                                                                 (202) 226-3636

Velázquez Hails Arrival of New Recovery Loans
Calls for Speedy Implementation of Other Small Business Lending Provisions

WASHINGTON, D.C. —Rep. Nydia M. Velázquez (D-NY), the Chairwoman of the House Committee on Small Business, today heralded a new lending program that will provide interest-free loans of up to $35,000 to small businesses. Velázquez said the newly launched American Recovery Capital (ARC) loan program, which was established through the American Recovery and Reinvestment Act (ARRA), are part of Democrats’ ongoing efforts to rebuild the economy.

“There are many businesses that have great potential, but they need a little boost to make it through the current rough patch,” said Velázquez. “That is why we included this program in the Recovery Act: to give small businesses some breathing room, so they can keep the lights on, meet payroll and, eventually, put Americans back to work.”

Under Velázquez’s leadership, the House Small Business Committee worked to include the new lending program in the Recovery Act. The loans will be made by commercial lenders and can be used for payments of principal and interest for existing, qualifying business debts like credit card obligations, mortgages, lines of credit, and balances due to suppliers, vendors, and utilities. Funds borrowed through the program are provided interest free and borrowers have one year before repayment needs to begin. Businesses that are experiencing immediate financial hardship, but deemed by the Small Business Administration (SBA) to be otherwise viable, will be eligible for the loans. Velázquez said that, in addition to the new ARC loans, the Committee is pressing the Small Business Administration to swiftly implement other provisions in the Recovery Act that will help small companies access capital.

“While the ARC loan program is an important step, it is just one initiative to help entrepreneurs that are seeking affordable credit,” Velázquez said.  “As more of the programs in the Recovery Act come on line, small businesses should see an improved lending environment.”

In addition to the ARC loans, the Recovery Act 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.

“As our nation works to get out of this recession, entrepreneurs need an SBA with the tools and resources that help them stay afloat,” said Velázquez. “Not only will the Committee be asking the SBA to implement the Recovery Act measures as quickly as possible, we will also be seeking new ways to strengthen and improve all of the agency’s programs.”

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.

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