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

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Through the program, small businesses that are havinb trouble making payments onexisting non-SBAq loans can borrow up to $35,000, interest-free. The mone y can be used to make up to six months of payments of principal and interest on smallk business debt ranging from mortgages to credit Small businesses will have one year aftef the final disbursement of these bridgs loans before they have to stary payingthem back. They will then have five years to repay the The economic stimulus bill called for the SBA to creatw the new temporaryloan program.
The agencyu will guarantee 100 percent of the amount oftheses America’s Recovery Capital loans, whichh will be made througb its network of private-sector lenders. SBA Administratoer Karen Mills said the agency will providse guidance to lenders on the ARC program byJune 8, and will begin accepting loan packages from lenderw June 15. “We expect these loans to be in high Mills said. Tony president and CEO of the Nationall Association of GovernmentGuaranteed Lenders, estimates the approximatelhy $350 million in loans that will be available throughh the program will be used up “rather quickly,” perhapes in three months.
Lenders, however, are stilll awaiting crucial details onthe program, he said. Only small businesses will be eligibld to receivethe loans, for example, and the SBA hasn’rt defined viable yet. the SBA will be subsidizing the interest on the and the agency has not told lenderz what interest rate theycan charge. The SBA will provides these details to lendersJune 8, Mills In general, she said, viable small businesses are firms with a trackm record of success that are experiencing temporary difficulties, such as declining sales, due to the economic They also must present a plan demonstratinyg they will be able to sustain themselvea once they’ve used up the emergencyh loan, she said.
Lenders that currently do not participate inthe SBA’s government-guaranteed loan programd will be given the opportunityt to do so. This will enable them to help borrowerx who are behind on theifloan payments, and turn past-due loans into loanxs that are current. This should result in more banksd becomingSBA lenders, a goal of both Millsa and Sen. Mary Landrieu, who chairs the Senate Small Business andEntrepreneurship Committee. Only about half of all U.S. bankz make SBA loans, Landrieu said.
If theree is a problem with the progran that keeps banksfrom participating, “we want to correct it,” she