State, Feds Move to Mitigate Coronavirus Impact on Business
State and federal government agencies are taking steps to assist small businesses impacted by the coronavirus pandemic.
The state Department of Economic and Community Development will temporarily suspend principal and interest payments on loans to small businesses.
DECD commissioner David Lehman said postponing collections on the $100 million-plus in small business loans will allow employers to fund their payroll at a critical time.
“We are absolutely hearing and seeing the stress on the small business community,” Lehman said.
Gov. Ned Lamont said his administration has asked state banking leaders to offer similar assistance to their small business customers.
“We’re working with our banks as well on ways we can maintain liquidity so our small businesses know that they can keep going forward,” he said.
The administration expects to release more steps in the coming days that will further help businesses cope with this downturn.
Lehman said he will work with the U.S. Small Business Administration to implement low-interest federal disaster loans to companies impacted by the virus.
The SBA announced March 12 it will offer up to $2 million in assistance in low-interest loans to provide working capital to small businesses facing economic fallout from the COVID-19 pandemic.
Private nonprofits will also be eligible for the loans.
The interest rate for small businesses is 3.75%. The nonprofit interest rate is 2.75%.
The Trump administration is expected to request the U.S. Congress to increase loan funding to $50 billion, to “exercise available authority to provide capital and liquidity to firms affected by the coronavirus.”
Congress previously allocated $8.3 billion to assist small businesses battling the coronavirus as part of an emergency spending package passed March 4.
The SBA’s Office of Disaster Assistance will coordinate with governors to submit requests for economic injury disaster loan assistance.
Once a declaration is made for specific areas in a state, information on the application process for disaster loan assistance will be shared with impacted communities.
Businesses can use these loans to pay fixed debts, payroll, accounts payable, and other bills that can’t be paid because of the disaster’s impact.
Loan terms can be for up to 30 years to keep payments low, but terms will be based on each borrower’s ability to repay.
The SBA loan guarantee program will make financing available through its network of participating banks and credit unions.
The U.S. Department of Labor this week announced new guidelines giving states greater flexibility administering unemployment insurance programs.
States can pay benefits to people whose workplace temporarily shuts due to COVID-19, to individuals under quarantine, and to workers who leave employment due to infection risk or to care for a family members.
CBIA is working with the governor’s office, state agencies, and other employer organizations to help coordinate the business community’s response to the pandemic.
In an email this week, president and CEO Joe Brennan told business leaders “we share many of the same issues and concerns as you and your employees.”
“Our priority is executing our business continuity plan, ensuring we continue to serve member companies while maintaining a safe workplace environment for CBIA employees,” he wrote.
“At this time, our Hartford office remains open. We are assessing that on a daily basis and have contingency plans in place should we need to close the office and work remotely.”
CBIA also canceled all conferences and events through the end of June. Public policy and other council meetings will be assessed on a case-by-case basis, with options for video or telephone conference calls.
Employers can find an array of coronavirus resources at cbia.com, including guidance for workplace health and safety, continuity and contingency planning, risk mitigation, labor and employment law compliance, travel information and guidelines, communications, and more.
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