We are living in unprecedented times as our nation, and the world, grapples with an invisible enemy. The Coronavirus (COVID-19) outbreak has impacted virtually every community and institution. Still, for many of the nation's 30 million small businesses, the economic ripple effect created by the pandemic has been particularly harmful. In essence, tens of thousands have lost most or all of their revenue, leaving them no choice but to idle their employees, often without pay.
As the president has said many times, it is imperative small businesses are provided with every possible resource during this time. Small businesses generate nearly half of our country's GDP, employ half our private-sector workforce, and create two out of every three net new jobs.
As a result of the president's leadership, the U.S. Small Business Administration is now able to provide affected small businesses with access to capital quickly, much of it at little-to-no cost.
Last week, the president signed an extraordinary $2.2 trillion economic stimulus that included nearly $350 billion in emergency capital for small businesses. The capital will help stabilize the small business sector by providing businesses with financial certainty – peace of mind that there will be enough available cash to cover day-to-day operating expenses and keep employees on the payroll.
The Paycheck Protection Program is a robust public-private partnership providing loans that are 100% backed by the SBA, and local banks administer the entire loan process. SBA made this access to capital as simple as possible for those applying for the loan. Additionally, no small business will need to contact a federal agency; instead, businesses simply need to fill out a two-page application and submit it to any existing SBA 7(a) lender, or through any other federally insured bank or credit union.
All small businesses are eligible, including non-profits, self-employed individuals, sole proprietorships, and independent contractors. Loans are available up to $10 million. The first payment on the loan will be deferred for six months.
Most importantly, these loans are forgivable – meaning they do not need to be repaid – as long as the funds are used to maintain employees at normal salary levels (or quickly rehire workers that have been laid off or furloughed) and pay for normal operating expenses, including fixed debt, rent, and other normal operating expenses.
During this unprecedented period of economic uncertainty and turmoil, the SBA is working around the clock to make emergency capital available to businesses in need: salon owners in southern California, fitness instructors in Texas, and wedding planners in Maine – any small business that is struggling to adjust to a sudden loss of income caused by this pandemic.
Within the scope of my authority as Administrator of SBA, I will continue using every available resource to expedite getting working capital into the hands of business owners who urgently need it. We have cleared hurdles and cut through red tape to ensure that every small business owner in the U.S. and our territories is eligible to apply for disaster assistance funding.
As we process loan applications, my entire team and I are focused on working with loan applicants to get to yes. Our website is dedicated to helping small businesses during this extraordinary time of need. More information on how SBA is helping businesses impacted by the Coronavirus is available at http://www.SBA.gov/Coronavirus.
This storm will pass, and when it does, small businesses will play a critically important role in bringing economic prosperity back to our communities. Until then, the president and the SBA are committed to keeping small businesses and their employees financially viable.
Jovita Carranza is the administrator of the Small Business Administration.