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ARC loans are deferred-payment loans of up to $35,000 available through SBA's 7(a) participating lenders. Potential borrowers are viable andfor-profit U.S. small businesses that need short-term help to make their principal and interest payments on existing qualifying debt.

ARC loans are interest-free to the borrower, 100 percent guaranteed by the SBA to the lender and have no fees associated with them. SBA pays the interest to the SBA 7(a) lender making the loan. ARC loan funds are to be used for payments of principal and interest for up to six months on existing, qualifying small business loans. This can include 504 first lien loans. ARC loans are available until funding runs out or September 30, 2010, whichever occurs first. The total allocated amount is estimated at $335 million.

ARC loans are designed to help businesses experiencing immediate financial hardship for the following reasons:

*loss/reduction of customer base;
*increase in cost of doing business;
*loss/reduction of working capital and/or loss/reduction of short
term credit facilities;
*inability to restructure existing debts due to credit restrictions;
*loss/reduction of employees (intellectual capital);
*loss/reduction of major suppliers (major suppliers out of

ARC loans will be made by commercial lenders, not Central Minnesota Development Company or the SBA.

If you have questions regarding ARC lending, visit  www.cmdcbusinessloans.com, visit your local lender or contact Scott Schake, Kevin Weeres or Mike Mulrooney at CMDC at 763-784-3337.