Feds hit 'pause' on repayment of Sandy disaster-relief loans
Cars and homes in the West End neighborhood of Long Beach was buried under sand after superstorm Sandy. Credit: Newsday/Alejandra Villa
Some businesses and homeowners who received government disaster loans to rebuild after superstorm Sandy in 2012 don’t have to make further payments this year because of the coronavirus pandemic, officials said Monday.
Payments on Economic Injury Disaster Loans from the U.S. Small Business Administration have been deferred until Jan. 1, said SBA administrator Jovita Carranza.
The deferment is automatic and loan recipients don’t need to make individual requests of the agency. “Automatically deferring existing SBA disaster loans through the end of the year will help borrowers during this unprecedented time,” she said.
The deferment covers loans from all previous disasters including Sandy, which struck Long Island on Oct. 29, 2012.
More than $90 million in loans was approved for businesses and about $730 million for homeowners harmed by Sandy in Nassau and Suffolk counties, according to a Newsday analysis of SBA data as October 2014. The number of businesses and homeowners that accepted the loans wasn’t immediately available.
The deferment comes after SBA last week issued an economic disaster declaration for all of New York’s 62 counties. The declaration is necessary for businesses to apply for disaster loans; homeowners are not eligible currently, according Matt Coleman, a spokesman for the agency’s Region II, which includes New York State.
To be eligible for a disaster loan, companies must have 500 or fewer employees and be unable to secure other financing to keep operating. The loans are for up to $2 million and can be repaid over a maximum of 30 years. The interest rate is 3.75%.
Nationwide, more than 75% of businesses are being negatively affected by the coronavirus outbreak and government actions to keep consumers at home, according to a national survey of 700 employers with fewer than 361 employees. The poll results were released Monday by the advocacy group National Federation of Independent Business, which canvassed its members via email on March 20.
Among the affected businesses, 54% said their sales have dropped and 23% are having trouble getting products to sell because the virus has shut down factories.
Questions about the deferment on existing SBA disaster loans and the new loans for businesses hit hard by the coronavirus may be sent to disastercustomerservice@sba.gov. Or you can call 800-659-2955 from 8 a.m. to 8 p.m. every day. More information also is available at sba.gov/coronavirus.
With Caroline Curtin
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.
