SBA offers loans to small business owners

For the first time in American history, the United States Small Business Association declared all 50 states “disaster areas” that are eligible for relief loans during the coronavirus pandemic.

“This is the largest economic recovery program ever,” Robert Piechota, the Long Island branch manager for the SBA, said in a webinar Sen. Anna Kaplan sponsored on April 13. “It’s uncharted territory, to be sure.”

One of the SBA’s programs, the Emergency Industry Disaster Loan program, provides 30-year loans with a 3.75 percent interest rate that business owners could use to pay fixed debt, Piechota explained. The money comes directly from the United States Treasury, and funds are allocated based on a business’ size and needs.

Additionally, he said, the SBA is offering business owners a Paycheck Protection Program (PPP) to ensure they keep their workforce employed during the pandemic. Under the program, business owners could apply for a maximum loan of $10 billion from independent lenders, such as banks. The loan would then cover eight weeks of payroll costs and benefits, and could be used to pay interest on mortgages, rent and utilities. The funds could also be used to help pay off a business owner’s EIDL.

Payments on the PPP can be deferred for six months, Piechota said, and is to be paid back after two years, at a 1 percent interest rate. But, he said, the entire loan could be forgiven if at least 75 percent of the funds are used for payroll, and a business owner maintains his or her full-time employee headcount during the term of the loan.

“It’s all going toward getting your workers back,” Piechota explained to business owners watching the Facebook Live event on Monday, adding that “a lot of these efforts are trying to get you to survive and thrive.”

Kaplan will be holding another webinar for small business owners on April 20, and noted, “Working together we will help all of the small businesses — that are really the backbone of our communities — to succeed and hopefully thrive in the months coming.”