Trump asks for $ 50 billion in SBA loans to fight COVID-19
- Trump has announced a major infusion into small business lending as part of a broader coronavirus response.
- The Small Business Administration‘s low-interest loans will go “effective immediately” in states and cities affected by COVID-19.
- Trump also called on Congress to increase the current funding levels for the SBA loan program to $ 50 billion.
Small businesses in areas affected by the novel coronavirus now have access to low-interest loans from the Small Business Administration (SBA). President Donald Trump announced the decision during a address of the austere oval office in which he described some immediate steps taken to ease the financial upheaval.
Just hours after the World Health Organization officially announced on Wednesday that COVID-19 is a “global pandemic,” Trump announced a travel ban for most of Europe and a set of initiatives to help American workers and business owners. Chief among these measures is the call to Congress to approve additional funding of $ 50 billion for the SBA loan program.
Although he stressed that the COVID-19 situation is “only a temporary moment that we will overcome together as a nation and as a world” and not a financial crisis, Trump said the injection of additional funds “will help small businesses overcome temporary problems.” economic disruption caused by the virus. “
The address came days after global markets saw a drop in oil prices and continued disruption from COVID-19 prompted Wall Street to stop trading for 15 minutes Monday.
This morning, the administrator of the SBA Jovita Carranza praised the president’s actions in a press release, calling last night’s announcement “bold and decisive action to make our 30 million small businesses more resilient to economic disruption from coronavirus. Small businesses are vital economic engines in every community and state, and they have Helped make our economy the strongest in Our agency will work directly with state governors to provide targeted, low interest disaster recovery small business loans who have been hit hard by the situation. “
Trump also announced that he was asking Congress to provide “immediately pay tax relief. He said he would also ask the Treasury Department to defer tax payments for anyone affected by the novel coronavirus. This deferral would come without interest or penalties and “would provide more than $ 200 billion in additional liquidity to the economy.” “
How To Get Help With SBA Loans
One of the main functions of the SBA is to provide federal relief to small businesses, private nonprofits, landlords and tenants affected by major physical and financial disasters. Following the President’s announcement, the SBA grants the loans through its Economic Disaster Loan Program.
According to the SBA, these loans are available to small businesses, small farmer cooperatives, and most private non-profit organizations. The loans are made to entities that have suffered “substantial economic harm”, which the SBA defines as a situation in which “the business is unable to meet its obligations and pay its ordinary and necessary operating expenses.”
This morning, the SBA revealed that coronavirus-related loans will have an interest rate of 3.75% for small businesses “with no credit available elsewhere” and 2.75% for nonprofits. Businesses with credit available elsewhere are not eligible for loans. Repayment terms can be up to 30 years, which officials say helps “keep payments affordable.”
Only companies from designated states and territories will be considered for this final batch of emergency funding. Affected locations may be added to the list of eligible areas at the request of a state governor, depending on the Coronavirus Preparedness and Response Supplementary Appropriation Act.
In the event that a business is approved for the loan, the SBA can provide up to $ 2 million for financial obligations and expenses, although the specific amount will be based on “your actual economic harm and your financial needs. company, that the company suffered material damage. “
Carranza said the SBA is working to provide additional support for small businesses as well as potential funding.
“The SBA continues to help small businesses advise and navigate their own preparedness plans through our network of 68 district offices and numerous resource partners located across the country,” she said. “The SBA will continue to provide every small business with the most effective, customer-centric response possible in these uncertain times.”
What SMEs should do now to deal with the coronavirus
The Centers for Disease Control and Prevention (CDC) is urging small businesses to take the following precautionary measures to counter the spread of the virus:
- Actively encourage sick employees to stay home.
- Separate sick employees.
- Emphasize staying home in case of illness, respiratory etiquette and hand hygiene by all employees.
- Perform routine environmental cleaning.
- Advise employees to take certain steps before traveling, including checking the CDC Travel Health Advisory for the latest tips and recommendations for each country you’ll travel to. Specific travel information for travelers to and from designated countries at risk of community spread of the coronavirus, and information for flight attendants, is available on the CDC website.
- Employees who are well but have a family member at home with COVID-19 should notify their supervisor and refer to CDC guidelines for how to perform a risk assessment of their potential exposure.
- If an employee is confirmed to have COVID-19, employers should notify co-workers of their possible exposure to COVID-19 in the workplace, but maintain confidentiality as required by the Americans with Disabilities Act . Employees exposed to a coworker with confirmed COVID-19 should refer to CDC guidelines for how to perform a risk assessment of their potential exposure.
For more information on the SBA’s Disaster Assistance Program, call 1-800-659-2955 or email [email protected]