Funds run out for federal business grant program, SBA says
Jovita Carranza, administrator for the U.S. Small Business Administration, testifies as Treasury Secretary Steven Mnuchin looks on during a Senate hearing in June. Credit: AP / Kevin Dietsch
Federal grant funds have run out for small businesses, farms and nonprofits trying to survive the coronavirus pandemic, officials said Sunday.
The Economic Injury Disaster Loan Advance Program has exhausted the $20 billion authorized by Congress, the U.S. Small Business Administration announced. As a result, the agency has stopped taking applications for Advance grants, which are up to $10,000 per applicant and do not have to be repaid.
However, SBA continues to accept applications for the companion program, Economic Injury Disaster Loans, or EIDL. To apply, go to covid19relief.sba.gov/#/
EIDL loans are for up to $2 million from the U.S. Department of Treasury with interest rates of 3.75% for small businesses and farms, and 2.75% for nonprofits. The loan term is up to 30 years.
SBA administrator Jovita Carranza announced Sunday that nearly 6 million employers received Advance grants and, as a group, they employ 30.5 million people. The grants went to employers with 500 or fewer employees.
In New York State, 392,366 employers received a total of more than $1.1 billion in Advance grants as of July 3. That's the fifth most after California, Florida, Texas and Illinois, according to SBA. Data for Long Island hasn't been released.
The Advance grants are “unprecedented” because Congress created them in response to the shutdown of all nonessential activity to slow the coronavirus’ spread, Carranza said on Sunday. The EIDL, in contrast, has been around for decades, helping businesses to recover from disasters such as superstorm Sandy in October 2012.
In April, Congress added more funding for Advance grants and could do so again. But in the meantime, the SBA cannot issue new grants, Carranza said.
The popularity of Advance grants contributed to the SBA suspending the application process for about two months to process more than 5 million applications received in a couple of weeks in the spring.
In May, the agency resumed taking grant applications but only from farmers. It started again to take grant and loan forms from small businesses and nonprofits last month.
James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.
