Small business loan effort might be less generous than advertised

Source: Politico | April 10, 2020 | Theodoric Meyer

Demand for the loans appears to be so high that it has overwhelmed the Small Business Administration, even though Congress set aside billions of dollars to help the program make loans and grants.

An emergency loan program meant to aid small businesses hurt by the coronavirus pandemic could be a lot less generous than previously advertised.

The Economic Injury Disaster Loan program is supposed to provide small businesses running out of cash due to the pandemic “with working capital loans of up to $2 million,” according to the Small Business Administration’s website.

But small businesses might not be able to get anything close to $2 million. Those that apply “will likely be given maximum loans of $25,000-$35,000 (as opposed to the advertised $2 million cap for EIDLs),” Tom Sullivan, the U.S. Chamber of Commerce’s vice president for small business policy, wrote in an internal email on Thursday evening, which was obtained by POLITICO.

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“The SBA is experiencing a large volume of applications for the Economic Injury Disaster Loan,” the agency wrote to one loan applicant in a message shared with The New York Times. “Due to current appropriations for this program, the SBA will make initial loan disbursements for two months of working capital up to a maximum of $15,000 per applicant.”

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The Small Business Administration disputed that loans would be capped at $25,000 to $35,000. Jennifer Kelly, a spokeswoman for the agency, wrote in an email to POLITICO that it was “not accurate” but declined to elaborate.

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  • Consistent April 11, 2020 at 10:08 am #38071

    EVERYDAY April 11, 2020 at 7:16 pm #38085

    Like every other government program — this one will be yet another scam. Certainly not as advertised. From what I hear applying for this “relief” is a real pain in the you-know-what. And after all the hoops these businesses will have to jump through, the amount they *might* get will be far less than they need.

    I expect most of the money allocated to this program will be eaten up by “administrative expenses.” That is typical of these sham government programs. The money will not go to those for whom it is intended.

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