Emergency loans of up to $2 million dollars are available now for small businesses affected by the COVID-19 pandemic.
Last week Gov. Mike Dunleavy submitted an Economic Injury Disaster Loan assistance request to the US Small Business Administration. The approval came through on Saturday (3-21-20).
Learn more about the SBA’s Economic Injury Disaster loans — and how to apply — at the Alaska Small Business Development Center.
The loans are designed to help businesses of less than 500 employees pay their bills and meet payroll — but the money can’t be used to pay off any debt incurred prior to the coronavirus emergency.
Kevin McGowan, a legislative staffer for Sitka Rep. Jonathan Kreiss-Tomkins, says the Small Business Administration is fine-tuning the loan program to help seasonal Alaska businesses.
“The SBA’s apparently working to defer loan payments for up to six months, maybe more, depending on how this all plays out,” said McGowan. “I think they’re maybe working on some other modifications to work with people who are losing their entire season’s revenue.”
Small businesses can get loans of up to $2 million, at 3.75-percent interest over 30 years. Nonprofits will pay one-point lower: 2.75-percent interest for 30 years. Religious organizations and charities are not eligible for the loans.
The National Federation of Independent Businesses released data on Tuesday (3-24-20) showing that 76-percent of the country’s small businesses will likely suffer financial harm during the coronavirus pandemic — that’s up significantly from information published just a week ago.
McGowan recommends that businesses interested in applying for the loans seek help from the Alaska Small Business Development Center, for guidance in filling out the paperwork. The cash usually arrives within 2-3 weeks.
“It’s not going to be the silver bullet for a lot of people,” McGowan said, “but think it will provide relief that helps a lot of businesses get through.”
McGowan adds that in previous disasters, very few loan applications to the Small Business Administration were turned down.