President Trump is asking Congress to approve a $50 billion relief package to small business owners impacted by coronavirus
Editor’s note: This story was last edited March 31, 2020. We will update the story as new information becomes available.
Update for March 31, 2020:
The CARES Act established a $349 billion Paycheck Protection Program, which will provide much-needed relief to millions of small businesses. You can read more about the Paycheck Protection Program on Workest.
President Trump is asking Congress to equip the Small Business Administration with $50 billion, which is in addition to the $7 billion authorized last week as part an $8.3 billion emergency spending package. The funds will be distributed as low-interest loans through the SBA’s disaster-relief program in response to the coronavirus.
Read more about the SBA coronavirus relief loan program here.
The SBA is helping small businesses access federal funding resources.
The SBA 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,” according to a news release.
How to apply and qualify for the SBA coronavirus relief loan
The SBA released the following details for accessing SBA’s coronavirus (COVID-19) Disaster Relief Lending:
- Small businesses that have experienced “substantial economic injury as a result of the coronavirus” in targeted regions will have access to low-interest federal disaster loans
- Upon receiving a request from a state’s governor, the SBA will use its own discretion provide an economic injury disaster loan declaration
- The declaration makes loans available to small businesses and non-profits in designated areas
- SBA’s Economic Injury Disaster Loans offers up to $2 million in assistance
- The 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%
- Terms and the length of the loan are determined on a case-by-case basis, based upon each borrower’s ability to repay.
For additional information, the SBA says to contact the disaster assistance customer service center at 1-800-659-2955 or e-mail [email protected].
Story from March 11, 2020
On the same day COVID-19 was officially declared a pandemic, President Trump announced Wednesday that he’s asking Congress to approve a $50 billion relief package for small business owners impacted by coronavirus.
He directed the Small Business Administration to issue $50 billion to fund low-interest loans to businesses whose revenue is impacted by the spread of coronavirus.
“Effective immediately the SBA will begin providing economic loans in affected states and territories,” Trump said in his Oval Office address. “These low-interest loans will help small businesses overcome temporary economic disruptions caused by the virus.”
It is important to note that business owners would need to qualify for the loan before receiving funding.
In response to the coronavirus outbreak, Trump also instructed the Treasury Department to defer tax pax payments — without interest or penalties — and asked Congress to eliminate payroll taxes. These moves were made to help mitigate the economic impact from the pandemic after days of market volatility.
This is in addition to the $8.3 billion funding bill Trump signed into law March 6. The Coronavirus Preparedness and Response Supplemental Appropriations Act (CPRSAA) authorized the SBA to fund emergency loans to small business owners.
As of Wednesday evening, there was no information about the $50 billion relief package on the Small Business Administration website. No further details have been released by the White House.
The Los Angeles County Economic Development Corporation posted on its website that “There is still some delay in SBA processing of SBA emergency loans, for businesses suffering economic losses as a result of coronavirus,” referring to the funds released in the CPRSAA.
We will continue to update this story.