SAN DIEGO (KGTV) — Small businesses trying to stay afloat amid coronavirus restrictions can apply for up to $10 million in forgivable low-interest loans to help them get by.
The Federal Small Business Administration has opened its application site for businesses with fewer than 500 employees to apply for the loans, which would have an interest rate of no more than 4 percent.
The loans are part of the stimulus package Congress and the President authorized last week. They are meant to help small businesses maintain payroll and meet essential obligations like rent, mortgages and utilities at a time social distancing has eliminated most consumer spending.
If an employer uses the money as intended, the government says it will forgive the loans.
"Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels," according to the Small Business Administration. "Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease."
Kelly DuFord Williams, a managing partner at Slate Law Group, says this is an unprecedented opportunity for small businesses, given the low interest loan offer and six months of deferred payments.
"Small businesses employ a lot of people, especially in San Diego, with such a big entrepreneur community, and the last thing they want is all of us turning off our lights and doing mass layoffs just because of temporary circumstances," Williams said.
Jennifer Byard, who owns Communal Coffee in North Park and South Park, said her sales have dropped 75 percent and that she has had to reduce her employees from 22 to eight.
Byard plans to take out at least $100,000 to make it through.
"I think it's really important for me to have some backup funds right now to be able to reopen, to be able to keep my employees, to pay them more," said Byard, whose shop is now doing takeout only during the day while offering pizza and salad in the evening.
For more information on the loans visit SBA.Gov.