The COVID-19 coronavirus pandemic has created challenges for individuals and businesses, and it remains unknown when the crisis will end. But many have shifted their focus not to the troubles but relief from them, now and in the future.
On Monday, March 16, the State of Delaware formally submitted an application to the U.S. Small Business Administration (SBA) to assist small businesses in Delaware with an Economy Injury Declaration. The request would make loans available to small businesses, as well as non-profit organizations in Sussex, New Castle and Kent counties.
Bethany-Fenwick Area Chamber of Commerce Executive Director Lauren Weaver sent out a letter to Chamber members, as well as other small businesses in the area, informing them of the opportunity to apply for the loans.
“These loans are up to 30 years with a fixed rate, for non-profit and for-profit entities, with no penalty of early repayment,” Weaver said of the loan program. “If businesses and organizations are predicting a financial impact that will hinder covering their operating costs, they should apply.”
And businesses certainly don’t have to go through the loan process alone. Weaver and her staff are available Monday through Friday from 9 a.m. to 5 p.m. to answer any questions.
“We are fielding calls,” Weaver said. “We do not receive the applications, so I am not privy to the numbers” of applications sent in so far,” she said. “However, I know we have been providing resources and answering questions for our local members.”
Based on a conference call that Weaver was on last week that was hosted by the Delaware Small Business Administration, it was “recommended that a business request a loan amount equal to at least nine months of estimated operating expenses.”
Businesses are being urged submit their applications in a timely manner since there is an expectation that there will be a large number of applications, especially considering states such as California, Washington, Connecticut, Maine and surrounding areas were already approved as economic disaster areas before Delaware.
“From the time the completed application is received, businesses can count on relief from the Federal SBA Loan in seven to 21 days,” added Weaver. “Please visit out website for additional information and documentation about these programs, and the 3-Step Process for Disaster Loans. Documents are available online.”
The U.S. SBA is offering designated states and territories the low-interest federal disaster loans for working capital to small businesses that are suffering substantial economic injury as a result of the coronavirus pandemic.
Upon a request received from a state’s or territory’s governor, the SBA will issue under its own authority, as provided by the Coronavirus Preparedness & Response Supplemental Appropriations Act that was recently signed by President Donald Trump, an Economic Injury Disaster Loan declaration.
The SBA’s Economic Injury Disaster Loans offer up to $2 million in assistance and can provide vital economic support to small businesses to help overcome the temporary loss of their revenue from the crisis. The loans can be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the pandemic’s impact. The interest rate is fixed at 3.75 percent for small businesses or 2.75 percent for non-profits.
The SBA loans are offered with long-term repayment plans in order to keep payments low and manageable, and can allow for up to 30 years to pay them back. Terms are determined based upon each borrower’s ability to repay, which is done on a case-by-case basis.
There are some credit requirements to apply for the loans. Among them, applicants must have a credit history acceptable to SBA, and they must show the ability to repay the loan. Collateral is required for all Economic Injury Disaster Loans of more than $25,000, and the SBA will accept real estate as collateral when it is available. SBA will not decline a loan for a lack of collateral, but it will require the borrower to pledge collateral that is available.
Applicants may apply online, receive additional disaster assistance information and download applications at https://disasterloan.sba.gov/ela. Business owners can also find out information by calling the customer-service phone number at 1-800-659-2955 (TTY: 1-800-877-8339) or emailing email@example.com.
In addition to the loan option, Delaware’s Department of Labor has issued new guidelines for Unemployment Benefits based on the COVID-19 outbreak. Delaware Secretary of Labor Cerron Cade issued the new guidelines to enhance the ability of Delaware’s unemployment insurance program to provide cash assistance to many Delaware workers whose employment has been impacted directly by coronavirus and who would not typically qualify for benefits.
There are some new unemployment insurance guidelines being issued, including that workers are eligible to receive benefits if an employer needs to curtail or shut down operations temporarily because of the State of Emergency declaration or the coronavirus outbreak. Also, a worker who has been ordered by a medical doctor to self-quarantine as a result of, or due to risk of, exposure to coronavirus will be eligible to receive benefits.
Parents or guardians who have been forced to quit or take unpaid leave from their jobs to care for children due to the emergency closure of schools will be eligible for benefits. Workers who’ve been forced to quit or take unpaid leave to care for a loved one who has been diagnosed with coronavirus will be eligible. If a worker falls ill to the virus and is unable to work, they may be eligible. There is also a possibility that part-time workers may be eligible for benefits as well.
Although state offices are closed to public access during the State of Emergency, the state’s Department of Labor will remain open while offering the ability for residents to file for unemployment benefits online at https://ui.delawareworks.com/. Those with questions can have them answered via email at firstname.lastname@example.org or by calling (302) 761-8446.
The Bethany-Fenwick Chamber’s website is continuously being updated with information and resources to provide its membership with the latest available information. Weaver noted that they are requesting anyone with requests or questions to reach out to the Chamber office.
“For us to best serve our members, we need to know and share what our members are doing to manage risks,” she concluded. “To that end, we ask that our members tell us what’s working and what they need help with.”