Businesses can get loans for COVID-19 by Friday

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Firms will be able to apply on Friday, with an approval process that has been truncated compared to traditional business loans.

Small businesses seeking loans through the government’s $ 2 trillion coronavirus aid package can receive money as early as Friday.

This prophecy came on Tuesday from senior administration officials who spoke to journalists about the details of the loan program.

Companies will be able to submit their applications on Friday. As the government uses an approval process that has been stripped of that used for traditional business loans, money may be available to borrowers on the same day, officials said.

Officials spoke to journalists on condition of anonymity as the details had not been officially made public.

Loans are available for small businesses ranging from sole traders and freelancers to companies with up to 500 employees.

The money is intended to help companies that have suffered huge income losses from the outbreak, including restaurants across the country that have been forced to close.

The loans are guaranteed by the Small Business Administration. They provide deferred payments and offer the prospect of forgiveness if the money is used to retain workers or to re-hire those who have been made redundant.

Companies can borrow up to $ 10 million at an annual interest rate of 0.5% based on salary costs as well as rent, mortgage interest, and utilities. They will have to provide documentation of these expenses, officials said.

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All banks, credit unions and institutions in the agricultural credit system that are federally insured will be allowed to make loans, not just the institutions that are current SBA lenders. The government will consider accepting non-bank lenders such as internet companies as participants in the program. Most borrowers are expected to apply for loans online.

Loans, under the so-called The Withdrawal Protection Program is one aspect of the government’s aid program. The SBA has started lending money under its disaster loan program, and is also offering bridging loans that offer up to $ 25,000 in the form of a loan with a quick payback. Details of all coronavirus loans can be found on the SBA website at www.sba.gov/coronavirus.

In addition, the Federal Reserve is planning a direct small business loan program. Details of this program have not been released.

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