The federal Small Business Administration (SBA) is working with state officials to support small businesses impacted by the spread of the coronavirus (COVID-19) with up to $2 million targeted, low-interest disaster recovery loans.
President Trump’s National Emergency declaration — the “Coronavirus Preparedness and Response and Supplemental Appropriations Act” — in response to the COVID-19 spread in the U.S. authorizes the SBA to offer Economic Injury Disaster Loans to struggling small businesses, according to the SBA.
“The president’s declaration, coupled with the administration’s unprecedented efforts to mobilize and involve the full force of the federal government and the private sector — including leaders in science, medicine, transportation, finance and business — will help save lives and reduce economic disruptions in every community,” said SBA Administrator Jovita Carranza.
“The agency is working closely with governors to make up to $2 million in targeted, low-interest disaster recovery loans available to any small business enterprise that has been severely impacted by the situation,” she said.
Loans can be used to pay fixed debts, payroll accounts payable and other bills that can’t be paid because of the disaster’s impact, according to the SBA. The interest rate is 3.75% for small businesses and 2.75% for nonprofit organizations, according to the SBA.
Local banks are working with business clients to ensure they have the resources they need to support their businesses at a time when they are sure to see a decrease in revenue as state officials call for the closure of nonessential businesses due to the outbreak of the coronavirus in the commonwealth.
In a statement, Customers Bank applauded the effort by the SBA to mitigate the economic and financial shortfalls on the small business community. President and CEO Richard Ehst said the bank has “committed to provide $200 million in new small business lending to qualifying companies.”
“We value the health and wellbeing of our clients and team members above all else and want to make sure the business community is aware of this important program,” Ehst said. “We want businesses throughout the community to know we are available to help them navigate the complexities of the SBA loan process. We can also provide other financial solutions, including lines of credit, to help mitigate any issues caused by this situation.”