Struggling small businesses may soon find relief from the Small Business Administration’s America’s Recovery Capital (ARC) loan program. The guidelines of the ARC loan program, which were released yesterday, state that eligible small businesses could receive up to $35,000 in debt relief beginning as early as June 15.

ARC loans, authorized as part of February’s stimulus bill, have a very specific set of rules governing who can receive them, what they can be used for and so on. Here is a basic outline.

Who’s eligible?

• Businesses that have been in operation at least two years.
• Businesses that have been profitable in at least one of the past two years.
• Must be able to prove financial hardship, as evidenced by declining sales, frozen credit lines, rising business costs, or difficulty making rent, payroll or loan payments.
• Must show you are running a “viable” business by providing cash-flow projections for at least the next two years.
• Must have “acceptable” business credit scores.
• Can’t be more than 60 days past due on any loan you’d like ARC loans to help cover.

How can the loan be used?

• Can’t be used to make payments on loans backed by the SBA before Feb. 17, 2009.
• Other types of business debt are fair game. This includes a commercial mortgage or lease, home equity loans used for business finance, bank loans made outside of the SBA, notes payable to suppliers, and credit card debt.
• ARC loans also cover personal credit cards if used for business expenses.
• ARC loans can be used on multiple types of debt.

How must the loan be repaid?

• Money from ARC loans can be used for up to six months, with no repayment due on the loan for another year.
• After that, you have five years to pay back the loan principal.
• The government covers interest payments.

How do you apply?

• SBA will make guarantees on loans rather than lending directly, so loans will need to come from participating banks.