Small businesses and non-profits that have sustained economic injury because of the COVID-19 disaster should not wait for more action from Congress before they apply for a Small Business Administration economic injury disaster loan.
That’s the advice of Jayne Armstrong, Iowa district director for the U.S. Small Business Administration (SBA). She spoke Monday night during a tele-town hall hosted by U.S. Rep. Cindy Axne (D-3rd District).
“There’s obviously a lot of activity going on in Washington with potential resources coming out at the federal level,” Armstrong said. “But what we’re encouraging small businesses to do is, if they have been economically hit by the disaster, then we still encourage them to apply for the economic injury disaster loan. And they can always cancel it later.”
Armstrong said SBA is getting “thousands and thousands of calls and emails every day that we’re trying to help small businesses navigate the resources that are available.”
Gov. Kim Reynolds has ordered the closure of numerous businesses, including bars, recreational, centers, theaters, salons, barber shops and more. Iowa Workforce Development has said it is receiving a “staggering” number of unemployment applications due to the effect of the COVID-19 pandemic.
Congress continued working Tuesday on a $2 trillion coronavirus disaster package that includes financial assistance for businesses and hospitals and direct payments to taxpayers as an economic stimulus. Reynolds also announced Monday that the state will provide up to $4 million in grants for companies with two to 25 employees, as well as some tax extensions for businesses with fewer than 50 employees.
The SBA disaster loans, announced Saturday, offer up to $2 million in low-interest loans, available statewide to small businesses and private, non-profit organizations. The loans can be used to pay fixed debts, payroll, accountable payable and other bills.
The interest rate is 3.75% for small businesses and 2.75% for non-profits. 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, according to a news release.