The U.S. Small Business Administration (SBA) opened the spigot for low-interest federal-disaster loans for working capital to Minnesota small businesses suffering economic injury as a result of COVID-19 in Minnesota and across the nation.
SBA ramps up business loans as Fed pledges action
March 23, 2020 at 11:30PM
On Monday, SBA Regional Administrator Robert Scott told the Star Tribune that there is also a principal and interest payment deferral program available.
The SBA, which guarantees loans from banks and other lenders by up to 90%, is operating seven days a week, Scott said Monday.
The agency urges small-business borrowers and loan applicants to use its website, e-mail address and toll-free hotline. Applicants may apply online, receive additional disaster assistance information and download applications at https://disasterloan.sba.gov/ela. Applicants may also call SBA's Customer Service Center at (800) 659-2955 or e-mail disastercustomerservice@sba.gov for more information.
The SBA had to take down its website for an unspecified period over the weekend because of unprecedented demand and to increase bandwidth as thousands of independent restaurants, retailers, manufacturers and other businesses cut back staff dramatically or closed abruptly amid government advisories and few customers.
There was anecdotal criticism from small businesses and landlords who said Monday they couldn't reach SBA.
Mike Roess, owner with his wife, Ann, of iMetro Property, which operates three shopping centers with several dozen small-business tenants, said he and several of his tenant businesses have been unable to complete a disaster-loan application on the SBA website since Saturday.
"We struggled through the process due to what we perceived as an overwhelmed server," Roess said. "Peak hours are 7 a.m. to 7 p.m. We have been unable to finish the process of applying for an SBA disaster-loan application of up to $2 million. The SBA decides how much we would get."
He said none of the tenants he had spoken with since Saturday have been able to complete an SBA loan application. "These people are desperate," Roess said.
The SBA said it is working to accommodate borrowers seeking forbearance and to take 3.75% disaster-loan applications from new small-business customers.
"Small businesses, private nonprofit organizations, small agricultural cooperatives and small aquaculture enterprises that have been financially impacted as a direct result of the Coronavirus (COVID-19) since Jan. 31, 2020, may qualify for Economic injury disaster loans of up to $2 million to help meet financial obligations and operating expenses which could have been met had the disaster not occurred," said SBA Administrator Jovita Carranza in a prepared statement.
Meanwhile, the Federal Reserve moved Monday in what the Wall Street Journal called a "whatever it takes" moment to restore stability from financial markets to Wall Street.
Among the moves is a significant Main Street lending program directly aimed at aiding small businesses, if Congress clears the way, the Associated Press reported.
Also Monday, the Minnesota Department of Employment and Economic Development said it's creating an emergency loan program that would provide 50% forgivable loans of between $2,000 and $35,000 to help Minnesota small business owners affected by temporary closures ordered by Gov. Tim Walz.
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