US Rolling Out Low-Interest Loans to Small Businesses Impacted by Coronavirus

The Epoch Times ^ | March 12, 2020 Updated: March 12, 2020 | MEL AKAN

[E. Pluribus Unum]

WASHINGTON—U.S. Small businesses hurt by the COVID-19 outbreak will be able to receive up to $2 million in disaster assistance loans as part of the economic relief package offered by President Donald Trump.

In his address to the nation on Mar. 11, Trump said he instructed the Small Business Administration (SBA), a government agency, to “provide capital and liquidity to firms affected by the coronavirus.”

He called on Congress to increase funding for the SBA program by an additional $50 billion.

CORONAVIRUS SPECIAL COVERAGE

“These low-interest loans will help small businesses overcome temporary economic disruptions caused by the virus,” Trump said.

The president has also offered tax deferral for individuals and businesses impacted by the health crisis.

“Using emergency authority, I will be instructing the Treasury Department to defer tax payments, without interest or penalties, for certain individuals and businesses negatively impacted,” Trump said.

Deferring taxes, he said, would inject more than $200 billion of liquidity to the economy.

The tax deadline falls on the traditional April 15 due date. As of this writing, the Treasury and the IRS have not issued a formal announcement on the deferral.

The president also urged Congress to pass “immediate payroll tax relief.”

The SBA announced on March 12 that it began to offer federal disaster loans up to $2 million to small businesses “in designated areas of a state or territory.”

“These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact,” the SBA said in a statement. “The interest rate is 3.75 percent for small businesses without credit available elsewhere; businesses with credit available elsewhere are not eligible. The interest rate for non-profits is 2.75 percent.”

[Alberta's Child]

At first glance this looks like a good move. I’m not sure why President Trump is so fixated on a payroll tax suspension, though. This doesn’t help much when lots of industries are looking to reduce staffing substantially.

[ConservativeInPA]

The president also urged Congress to pass “immediate payroll tax relief.”

This could be a long term winning issue. I would love to see this as a entry-point to some real tax reform ... but we need to get the borrowing under control.

[ConservativeInPA]

This doesn’t help much when lots of industries are looking to reduce staffing substantially.

It adds up to nearly 15% of wages. It might not save all jobs, but it could allow employers to hang in there a little while longer until this virus stuff settles. But I suspect it is being brought up for the long term. Payroll taxes are highly regressive. It is an argument for the election as a way for further tax reform.

[Chuckster]

mark

[Shadow44]

Yeah, I mean you don’t get the benefit if your workplace is shut down for 3 weeks.

[LegendHasIt]

Too bad for the small businesses that they will merely be loans, rather than giveaway bailouts that the Big businesses,.. those “Too Big To Fail” that will soon be passed out by the trillions.

[Svartalfiar]

Yeah, I mean you don’t get the benefit if your workplace is shut down for 3 weeks.

Eh, it depends. Our office is mostly shut down already, but the boss decided to still pay everyone through it.

We're definitely hurting, usually April is one of our busier months, but most events we had on the calendar have been canceled or delayed.