While everyone is doing the best that they can in protecting themselves and their community from Covid19, daily life has seen a big change as a result of lockdown and social distancing in various cities around the world. These measures are necessary though, we can safe that it has negatively impacted the American economy. More so with regards to small businesses, that are really doing everything to stay afloat, even to use långuiden to get additional funds.
In an effort to mitigate this near economic breakdown, the federal government announced series of measures which include offering all affected businesses with low-interest loans ranging up to two million dollars.
Who provides Small Business Assistance?
Loans would be backed by the US SBA or Small Business Administration that have already issued a full federal-funded Economic Injury Disaster Loans otherwise called as EIDL. Businesses that are affected by emergencies and natural disasters can take advantage of this.
According to SBA chief Jovita Carranaza, he confirmed that SBA is going to work directly with the Governors of each state to offer the targeted, low-interest loans to small businesses that is greatly impacted by the pandemic.
Who is Eligible for the Small Business Loan?
This program is specifically designed to provide assistance to small businesses as well as small agricultural cooperatives that suffered massive economic loss because of the pandemic. A vital requirement is, these businesses should be incapable of securing alternative funding. Businesses can’t apply independently; first in their local county and state officials should work with the Small Business Administration to be able to declare disaster in their region. That is the only time when businesses would have the opportunity of seeking emergency funds.
How Loans can Help?
The pandemic will put a lot of stress and pressure to small businesses. When cities and towns entered a lockdown, small businesses similar to retail stores and restaurants that are operating with small profit margin at best of times would be the ones to initially feel the impact. Businesses are going to experience failures in their supply chains, suffer from reduced sales or enforced a temporary closure.
To deal with these challenges, small business loans might be used in paying fixed debts, accounts payable, payroll as well as other bills that can’t be paid because of the pandemic. While the specific conditions and terms of the loans depend on the company’s ability to pay back the loan amount, the repayment period shall not exceed thirty years with the interest of 1% for the loan.