On what seems to be a preventive move, the federal government has announced a loan program starting this week in order to help small businesses that are feeling the heat due to the ongoing recession.
Phillip Silva, district director for the SBA (Small Business Administration) which is currently overseeing the American Recovery Capital Loan Program said that this would aid small businesses, which are experiencing sales erosion due to the recession and are finding it difficult to pay back their financial indebtednesses.
Eligible companies are entitled for $35,000 interest free and SBA guaranteed loans for a period of five years, provided they apply to their area banks that would decide which of the two would be granted. SBA is currently paying the interest on loan costs charged by the area banks.
Around $225 million of the $700 odd billion-stimulus package bill that was passed by the Congress was meant for the payment of interest charges on loans that were granted to small enterprises nationwide by the SBA.
