SBA Offering Low-Interest Loans To Small Businesses Hurt By Pandemic
Gov. Janet Mills' declaration of a "civil emergency" Sunday opened up one option for some Mainers who are being financially hurt by the Covid-19 outbreak. They can now apply for low-interest loans from the federal Small Business Administration (SBA).
Low interest loans through the Small Business Administration are available to small companies and not-for-profits, including areas like agriculture and aquaculture. The SBA is urging people to apply now for the loans of up to $2 million.
And SBA spokesperson Michael Lampton says they're available for any expenses that can't be paid because of the impact of the crisis:
Lampton: Once each state gets a declaration, then all small businesses within that state can apply for SBA economic assistance. These loans are specifically to pay for fixed-debts — any accounts payable, any payrolls or any other bills that may become due as a result of this particular virus. If they had a downturn as a result of — say, if they were a business that relied heavily on tourism, if they were a restaurant — and now you're no longer getting the customer base that you routinely had, and, obviously, you're having a downturn in your regular revenue growth. They would be eligible to apply for this economic counter-disaster loan.
Flaherty: I'm reading here that this applies to small businesses, private nonprofit organizations of any size, small agricultural cooperatives and small aquaculture enterprises. What about people who work freelance? People who are sole proprietors?
Lampton: If they're sole proprietors, and they reflect that they are a business on their tax return, then they're eligible to apply. But they have to be a registered business per IRS regulations. You have to be registered as a legitimate business in order to apply for this loan. If you're just showing income, ordinary income or your tax return, you may not necessarily be a business. You're just, you know, you're making money. But in order for you to apply for this loan, you have to be a legitimate business. Which means that you have to be registered either with the IRS or with the state or with the county.
Flaherty: What other resources is SBA making available to small businesses in Maine and around the country?
Lampton: Well, there may be some other resources through the other divisions of SBA, and it may come as a result of the existing legislation that is in process, but has not passed yet. The only legislation that has passed that allows SBA assistance at this point is the disaster program. And that loan is the only one that's available. As of today, as I indicated, there is other legislation being process within Congress that may open the doors for some additional things. But at this point, I can only speak to what's available right now, and that's this economic injury disaster loan for small businesses.
Flaherty: All right, Michael Lampton with the Small Business Administration. Thank you so much.
Lampton: Absolutely. Thank you.
Flaherty: And you can learn more about the SBA's disaster assistance loans at their site.
Originally published March 18, 2020 at 4:03 p.m. ET.