Uncle Sam is offering loans of up to $2 million to businesses that have been harmed by the coronavirus and cannot secure financing to keep operating, officials said Thursday.
The U.S. Small Business Administration will provide Economic Injury Disaster Loans to companies that are experiencing a temporary revenue loss. The funds may be used to pay debts, employee wages and other bills.
To be eligible, the affected business must have 500 or fewer employees and be in a designated disaster area. The business also must not be able to obtain credit elsewhere.
The interest rate on the loan is 3.75%.
The loan program has been used for years to help companies recover from natural disasters, such as superstorm Sandy in 2012.
SBA administrator Jovita Carranza said Thursday state governors must file a request to have their state or an affected region designated a disaster area. If the designation is approved, SBA will work with the governors “to provide targeted, low-interest disaster recovery loans to small businesses that have been severely impacted by the situation,” she said.
A spokesman for Gov. Andrew M. Cuomo couldn't immediately provide comment.
SBA also provides disaster loans to nonprofits with an interest rate of 2.75%.
Separately, Nassau and Suffolk counties are examining ways to aid small businesses, particularly independent retailers in downtowns.
Suffolk County Executive Steve Bellone said in a statement the Department of Economic Development and Planning is working on “a business response plan to provide information that would assist employers who have incurred economic hardship as a result of the coronavirus.”
He said the development department, together with the Industrial Development Agency and Department of Labor, will advise businesses on how to handle ill employees, workplace training and the virus' spread.
The Nassau County IDA is exploring financial aid.
IDA chairman Richard Kessel said fears about the coronavirus are threatening the survival of some small businesses as foot traffic and sales drop on Main Streets.
“We have begun exploring various options and we’re going to do whatever we can do to assist the small business community because they need help,” he said Thursday.
IDAs provide tax breaks to expanding businesses. After Sandy, many of the Island’s eight IDAs provided sales tax exemptions on the purchase of construction materials, equipment and other supplies needed to repair buildings damaged by flood waters.