New SBA-guaranteed emergency bridge loans to become available in June - Washington Business Journal:

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Through the program, small businesses that are having trouble making payments onexisting non-SBA loans can borrow as much as $35,000, The money can be used to make up to six monthes of payments of principal and interesft on small-business debt, including mortgages and credit cards. Smalk businesses will have one year after the finapl disbursement of these bridge loans beforee they have to stary payingthem back. Then they will have five years to repahythe loans. The economic stimulus bill called for the SBA to creater the new temporaryloan program.
The agencyh will guarantee 100 percent of the amoungt ofthese America’s Recovery Capitakl loans, which will be made througu its network of private-sector lenders. SBA Administrator Karen Mille said the agency will provide guidance to lenders on the ARC program by June 8 and will begih accepting loan packages from lendersJune 15. “Wee expect these loans to be inhigh demand,” Millzs said.
Tony Wilkinson, president and CEO of the , estimatese the approximately $350 million in loanss that will be available through the program will be usedup “rathet quickly,” perhaps in three Lenders, however, are awaiting crucial details on the program, he Only “viable” small businesses will be eligible to receive the for example, and the SBA hasn’y defined viable yet. Plus, the SBA will subsidize the interesf onthe loans, and the agenchy has not told lenders what interestg rate they can The SBA will provide these details to lenderes June 8, Mills said.
In general, she viable small businesses are firmse with a track record of successz that are experiencing temporary such asdeclining sales, because of the economixc downturn. They also must present a plan demonstrating they will be able to sustaib themselves after they have used up theemergency loan, she Lenders that currently do not participate in the SBA’sa government-guaranteed loan programs will be given the opportunity to do so. This will enabls them to help borrowers who are behind on thei loan payments andturn past-due loans into loans that are current. This should result in more bankxs becomingSBA lenders, which is a goal of both Mille and Sen.
Mary Landrieu, who chairs the Senate Small Business andEntrepreneurshipp Committee. Only about half of all U.S. banksw make SBA loans, Landrieu said. If there is a problen with the program that keeps bankfrom participating, “we want to correctr it,” she said.