Business

Valley small businesses lean on reps as they seek emergency loans

With the COVID-19 pandemic leading much of the country to shelter-in-place and bringing on a state of economic uncertainty, many small business throughout the nation, including those in the Central Valley, are facing the a unique challenge – merely surviving.

From farmers to restaurants to small mom-and-pop shops, businesses are trying to find a way to keep their employees on-staff

In response to this, Congress passed the CARES Act last Friday, which not only provides economic relief to individuals, but also provides loans to small businesses through the US Small Business Administration (SBA).

Prior to CARES, the SBA already established disaster relief loans for qualifying business affected by the pandemic-driven shutdown but the new legislation allows small businesses to receive money in a more timely manner.

The CARES Act provides $350 billion for 100 percent federally-guaranteed loans for 8 weeks of assistance to small businesses and 501(c)(3) nonprofits.

These paycheck protection loans will be for up to 2.5 times the average monthly payroll – based on last year’s numbers – up to $10 million.

Businesses will be able to begin applying for the paycheck protection loans on April 3.

Businesses can also request loan forgiveness on the loan if used for payroll costs, mortgage interest, rent and utility over the eight-week period.

Small businesses can apply for the loans online at the SBA’s website and can also request help from their representatives in Congress.

Tammy Johnson, a spokesman for Rep. Jim Costa (D–Fresno), reported heavy call volumes to their offices during quarantine.

“We are getting calls daily,” Costa spokeswoman Tammy Johnson said. “It’s a large percentage of the calls, inquiries that have come into our office, and we do have staff members working to help businesses who are calling about that.”

Rep. Devin Nunes’ offices in Washington and Visalia similarly reported high response.

“Our team has been fielding and responding to every call and email from residents,” Nunes spokesman Jack Langer told The Sun. “From our offices or at home, we’re working 24/7 to give Valley small businesses and constituents guidance on how to navigate this difficult period.”

Additionally, any businesses that have already applied for emergency economic injury disaster loan grants can request an advance of up to $10,000 on the loan for payroll costs and the like.

The SBA loans for payroll are being handled differently under the CARES Act compared to the agency’s disaster loans. Businesses will deal directly with the financial institution of their choice.

Lenders, such as a federally-insured bank, will and issue loans to businesses without SBA review, cutting out a step of bureaucratic oversight that would usually slow down the process of businesses receiving economic disaster loans.

Businesses with less than 500 employees are eligible for the SBA loan, as well as sole proprietors, independent contractors and self-employed individuals.

Scroll down for a copy of the SBA’s loan application and borrower information.

The Sun advises readers contact their business financing institution before initiating this loan application.

SBA Paycheck Protection Loan Application

SBA Paycheck Protection Loan Information Guide

Daniel Gligich is a reporter for The San Joaquin Valley Sun, focusing on Fresno State Athletics and the southern San Joaquin Valley. Email him at daniel.gligich@sjvsun.com.