By CBJ News Staff
President Donald Trump signed the $2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act into law on March 27, casting a lifeline to businesses hungry for relief, from major airlines to small mom-and-pop operators.
But despite Treasury Secretary Steven Mnuchin’s vow that about $350 billion in Small Business Administration loans for companies with fewer than 500 employees would go out the door at “lightning speed” – beginning as early as this Friday – the SBA is now saying small businesses might have to wait a bit longer than that.
In guidance sent out today by the SBA’s Iowa District Office, the agency explains that SBA CARES loans will not be available until program details are hammered out, a process it was reluctant to put on a timeline.
“SBA and the Department of Treasury are still in the process of implementing all the new loan programs associated with the CARES Act, including the Payroll Protection Program,” the Iowa District SBA office said in a release, adding that new policies, procedures and guidelines must be in place before lenders can begin making loans.
Though it is working as quickly as it can, the agency said, “We do not have a timeline for when these guidelines will be issued, but until we have those full guidelines, we’re not able to answer any questions about the new programs at this time.”
The SBA loans, known as the Paycheck Protection Program, will provide 100% federally guaranteed loans to small businesses that may be forgiven if borrowers maintain their payrolls during the crisis or restore their payrolls afterward.
U.S. Sen. Joni Ernst, joining Iowa Gov. Kim Reynolds’ Sunday news conference, said she did not have an estimate on how quickly funding would be sent out, adding she hoped it would be “soon.” In addition to funding for business relief, the massive stimulus includes funding for individuals and state efforts to respond to the outbreak.
Ms. Ernst said she expects there will likely be a discussion of more relief packages as the situation develops, a sentiment Mr. Trump endorsed Sunday.
“I’m prepared to do whatever is necessary to save lives and bring our economy back to where it was before,” the president said in a press conference.
While small businesses wait for CARES loan details, the SBA is encouraging small businesses and most private nonprofits to apply for SBA’s Economic Injury Disaster Loans. Loans are available at 3.75% for small businesses and 2.75% for nonprofits over 30 years.
The online Disaster Loan Application Portal is currently down, officials said, though applicants can still go to www.sba.gov/disaster and click on “Apply for Assistance.” They will be taken to a page where they can download and fill out the appropriate forms, with options to either upload the forms to SBA electronically or mail them in.
If a customer already started an application in the online portal, but unable to complete it before it went down, they can submit a completed application through the current process at www.sba.gov/disaster, making note of their application number, if available. CBJ