CEO Corner: Status update on current and anticipated resources for small businesses
Tuesday, March 17, 2020
MOUNT VERNON -- EDASC staff on Tuesday morning participated in a conference call with Sen. Patty Murray’s office and the U.S. Small Business Administration (SBA) for a status update on current and anticipated resources available to small businesses during the COVID-19 health crisis.
As was announced Monday, businesses in Skagit County and 31 other counties in the state are now eligible to apply for Economic Injury Disaster Loans through the SBA. These loans are meant to provide working capital to pay staff, rent, bills, etc., and are not for general refinancing purposes. There is no barrier to receiving this loan if you already have an SBA loan (7a or 504).
The loan process generally takes 3 weeks for review and another week to receive money. For information on these grants visit here, or contact 1-800-659-2955 or firstname.lastname@example.org.
It is still an open question whether applying for a loan disqualifies a business from a grant program that might be implemented later. We are also waiting to hear whether the existing requirement of two years’ prior business operation might be waived in this process. We will provide you with that information as soon as the SBA supplies an answer.
As always, SBDC and SCORE business advisors, all part of the SBA system, remain available to assist with loan packages or any other business advice and support that would be helpful.
One concern noted during the conference call was that the SBA is ill equipped to handle the workload generated by a deluge of disaster loan applications. Congress is considering an emergency funding measure to provide the SBA with an extra $100 million for funds and staffing to alleviate this problem.
Another option for businesses seeking loans is the SBA’s on-going Lender Match program.
The program connects small businesses with private lenders across the country for financing and has a fast turnaround compared to Economic Injury Disaster Loans. Those who use Lender Match may hear back from lenders in as little as two days for loans under $350,000 and within 6-8 days for loans over that amount.
Interest rates currently stand at 3.75% (for-profit companies) or 2.75% (non-profit), but those could decrease with the Federal Reserve Bank’s recent rate cut to 0%. Currently, the feds are considering increasing the percentage of their loan guarantees and waiving application fees.
For businesses that currently have SBA loans, deferment relief is also being discussed in Congress, so our representatives and senators should hear input on that topic. Existing policy allows for 3-6 months’ deferral by a private bank with SBA concurrence. Loan modifications could be possible as well.
EDASC understands that additional loans might not be the answer for struggling small businesses. As mentioned earlier, a direct grant program supporting small businesses has been discussed by policymakers but, as of now, there is little in the way of details. EDASC will keep you updated on this subject.
Please contact EDASC at email@example.com or 360-336-6114 with any questions, thoughts, or ideas you would like passed along to our elected officials and agencies.
John Sternlicht is the CEO of the Economic Development Alliance of Skagit County. The Economic Development Alliance of Skagit County carries out business attraction, retention and expansion and collaborative engagement to achieve a prosperous, sustainable and equitable community while maintaining Skagit County's natural beauty and quality of life.