President Donald Trump announced Wednesday night that he will instruct the Treasury Department to allow individuals and businesses negatively affected by the coronavirus to defer their tax payments beyond the April 15 filing deadline.
He also said that he would have the Small Business Administration start providing low-interest loans for businesses in states and U.S. territories that have been affected by the virus.
He said these loans would help small businesses overcome the economic disruptions that have been caused by the virus. In addition, he said he would request that Congress boost this loan pool by providing an additional $50 billion in funding for the SBA.
SBA Administrator Jovita Carranza was in North Texas on Friday talking about the low-interest loans.
“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,” she said in a statement.
“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. The SBA will continue to provide every small business with the most effective and customer-focused response possible during these times of uncertainty.”
Carranza answered some questions from the Fort Worth Business Press during her visit.
“I want small businesses to know that the SBA is here for them during this time. It was important for me to come to Dallas-Fort Worth and ensure our staff had all the resources they need to provide the best customer service to our small business community,” she said.
Q: What information will be needed so small businesses can apply?
A: The SBA will work with the Governor to provide the Economic Injury Disaster Loan assistance. Following that, small businesses will be able to submit an SBA business disaster loan application.
Q: How quickly can the businesses expect an answer on the assistance and receive any funding?
A: SBA works to process applications as quickly as possible. Loan processing typically takes 2-3 weeks with disbursement within a few days of receiving the signed loan closing documents. We encourage businesses to apply as soon as a declaration is made and not wait until they have an immediate need for funds to begin the process.
Q: Any specific industries targeted for these loans over others?
A: SBA’s Economic Injury Disaster Loan Assistance is not targeted to any specific industry and are available to small businesses who are located in a declared county and have suffered economic injury as a result of the Coronavirus.
Here are some details from the SBA on the disaster relief loans:
• The U.S. Small Business Administration 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).
• SBA’s Office of Disaster Assistance will coordinate with the state’s or territory’s Governor to submit the request for Economic Injury Disaster Loan assistance.
• 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%.
• SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.