UPDATE: Details on Loans for COVID-19 Impacted Small BizMarch 12, 2020
On Wednesday night, President Donald Trump addressed the nation from the Oval Office with formal remarks outlining some of his administration’s key proposals to address the health and economic implications of the coronavirus. Trump outlined his plans to provide a three-month tax deferral plan for individuals and small businesses as well as immediate payroll tax relief.
Of particular interest to small business, Trump proposed expanding low-interest U.S. Small Business Administration (SBA) loans to affected businesses. He said he will ask Congress to increase funding to allow SBA’s loan program to provide up to $50 billion in loans, more than double the amount of SBA loans provided in 2019. The president also said he would take executive action to provide emergency paid sick leave for workers who are ill, under quarantined or caring for others.
Details on tax relief as well as what specific SBA loan program and how the process would work remain to be seen, however NSBA will continue to provide updates as they become available.
UPDATE (1:45 p.m. EDT, 3/12):
The SBA recently outlined the process for accessing SBA’s COVID-19 disaster relief lending program along with a statement from Administrator Jovita Carranza in which she said, “… Our Agency will work directly with state Governors to provide targeted, low-interest disaster recovery loans to small businesses that have been severely impacted by the situation. Additionally, the SBA continues to assist small businesses with counseling and navigating their own preparedness plans through our network of 68 District Offices and numerous Resource Partners located around the country…”
According to that release and new guidance posted on the SBA.gov website, the process for accessing SBA’s COVID-19 related funding is listed below:
- The SBA is offering designated states and territories low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19). Upon a request received from a state’s or territory’s Governor, SBA will issue under its own authority, as provided by the Coronavirus Preparedness and Response Supplemental Appropriations Act that was recently signed by the President, an Economic Injury Disaster Loan declaration.
- Any such Economic Injury Disaster Loan assistance declaration issued by the SBA makes loans available to small businesses and private, non-profit organizations in designated areas of a state or territory to help alleviate economic injury caused by the Coronavirus (COVID-19).
- Once a declaration is made for designated areas within a state, the information on the application process for Economic Injury Disaster Loan assistance will be made available to all affected communities.
- SBA’s Economic Injury Disaster Loans offer up to $2 million in assistance and can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.
- These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses without credit available elsewhere; businesses with credit available elsewhere are not eligible. The interest rate for non-profits is 2.75%.
For additional information, please contact the SBA disaster assistance customer service center. Call 1-800-659-2955 (TTY: 1-800-877-8339) or e-mail email@example.com.
On Wednesday, March 11, NSBA President and CEO Todd McCracken joined with coalition partners in the Small Business Roundtable for a meeting with SBA Administrator Carranza. During the meeting, they discussed broad priorities for small businesses as well as the impact the coronavirus is having on small business.