Recently President Donald Trump tweeted that the government is eager to protect small businesses.
Small businesses and entrepreneurs are the backbone of the American economy. However, with the COVID-19 pandemic, small businesses across America are feeling the financial crunch. Millions of people are left out of the job, as the government has instructed people to stay at home and avoid unnecessary venturing out.
According to an analyst, it was predicted that the disruption to the businesses from COVID-19 can lead to approximately 15,000 permanent retail store closure in 2020. Moreover, the Economic Policy Institute predicts that the disease outbreak could potentially wipe out three million jobs from the U.S. economy before this summer.
Several U.S. States have ordered that non-essential businesses should close their doors to the customers. However, even in states where the orders have yet not been imposed, small businesses have already closed doors to the customers or have dramatically reduced their working hours.
With small businesses and retailers across the country preparing for closures that could last for months, business owners are left wondering for how long they will be able to cover their rent, pay salaries, and take care of other expenses.
Financial crunch is an issue that will be affecting millions of small businesses across the country. While cash flow is often a struggle for a small business even in a good economy, recently it has turned into one of the most important obstacles faced by small businesses and retailers.
So what are the options available with small businesses to stay afloat during this crisis?
The U.S. Small Business Administration has announced that small businesses that are affected by the coronavirus can apply for low-interest loans of up to $2 million. Moreover, the Treasury Department also announced it will defer the deadline for annual tax payments by 90 days.
President Trump recently stated that the SBA would serve as a clearing house for “up to $50 billion” in available loans to help struggling small businesses weather the coming storm.
Alejandro Contreras, director of the SBA’s Office of Disaster Assistance said, “The money’s already starting to be approved.” He further added that the agency was cutting red tape and many applications are already being processed.
Contreras further added, “On average, it takes between two and three weeks to process a decision on an application. However some clear-cut applications get approved much faster.”
The U.S. Small Business Administration has also approved a one-year deferment on the payments, so business owners have a full year before repayments begin. The interest rate is 3.75% for small businesses, 2.75% for non-profits.
It is important to take the right steps right now as thousands of American businesses and millions of their employees are at enormous risk. Small businesses can expect assistance from the American government as a part of the next economic stimulus bill which will hopefully be passed within days.
Small business owners need to take the time to think about how to rebuild their business once the COVID-19 pandemic is all over. Think about the coming opportunities, seek help from a financial professional, and devise a plan to rebuild your business.
Interested to learn more about the SBA loan offered by the American government in the wake of the pandemic? Call us right now to get the most up-to-date information. Reach out to SBA50K professionals to see what financial help you can receive from the government.