SBA aid package provides vital lifeline to help small businesses
Small businesses are the heart of not only our local Clinton and Anderson County economy, but also of the U.S. economy in general – make no mistake about it.
The statistics are staggering:
There are more than 30 million small businesses in the U.S.
They employ nearly half of all U.S. workers, according to the latest statistics from the U.S. Small Business Administration.
Today, though, our small businesses are hurting, with many having had to shut down temporarily and lay off employees because of the COVID-19 crisis.
The Anderson County Chamber of Commerce and the SBA want small businesses to know that there is help available to get them through the crisis.
That help comes in the form of an emergency federal loan program that began late last week.
It’s part of the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act passed by Congress and signed into law by President Trump. It includes an appropriation of $349 Billion for emergency small business loans.
Information is available at the chamber website, andersoncountychamber.org/covid19-small-business-resources, and at sba.com.
The SBA and the U.S. Treasury Department late last week said they have “initiated a robust mobilization effort of banks and other lending institutions to provide small businesses with the capital they need.”
Local banks and credit unions began making those loans last week.
The chamber and SBA urge small businesses to take advantage of the program if it applies to their situations.
This program is extraordinary and could well be a lifesaver for many of our small businesses.
A business is considered small if it has fewer than 500 employees, but most small businesses have fewer than 100 workers, the SBA says.
Using the SBA’s definition means that more than 99 percent of all U.S. businesses qualify as “small.”
Small businesses are credited with creating more than two-thirds of all new jobs in the U.S. each year, according to the SBA.
Therefore, help for small businesses during this crisis more than makes sense – it’s vital to our economy.
“The CARES Act establishes a new $349 billion Paycheck Protection Program,” the SBA explained.
“The program will provide much-needed relief to millions of small businesses so they can sustain their businesses and keep their workers employed.”
This money is available for small businesses to use to help retain employees, pay unrelenting overhead expenses such as rent and utilities, and keep themselves viable and ready to return to business as usual when this crisis ends.
The SBA said that it and the Treasury Department are trying to keep small businesses going until life can return to normal.
“This unprecedented public-private partnership is going to assist small businesses with accessing capital quickly,” said SBA Administrator Jovita Carranza.
“Our goal is to position lenders as the single point-of-contact for small businesses – the application, loan processing, and disbursement of funds will all be administered at the community level.”
Treasury Secretary Steven T. Mnuchin said the legislation “provides small business job retention loans to provide eight weeks of payroll and certain overhead to keep workers employed.”
In this program, “businesses can go to a participating SBA 7(a) lender, bank, or credit union, apply for a loan, and be approved on the same day,” Mnuchin said.
“The loans will be forgiven as long as the funds are used to keep employees on the payroll and for certain other expenses.”
The SBA said the program “will help small businesses with their payroll and other business operating expenses, and that it would “provide critical capital to businesses without collateral requirements, personal guarantees, or SBA fees – all with a 100% guarantee from SBA.”
Under the program, “All loan payments will be deferred for six months,” the SBA said.
“Most importantly, the SBA will forgive the portion of the loan proceeds that are used to cover the first eight weeks of payroll costs, rent, utilities, and mortgage interest.”
The loan program will be available retroactive to Feb. 15, 2020, so employers can rehire their recently laid-off employees through June 30, 2020, the agency said.
This is an important lifeline for our vital small business community.
We urge any small businesses that can benefit from this program to reach out to participating lenders now.