With the White House and Senate reaching a deal earlier today to provide a $2 trillion stimulus package to bolster the national economy in the wake of COVID-19, Pennsylvania’s small businesses can benefit if they act now, according to the leader of a local mortgage-lending firm.
As lawmakers finalize the details of the plan, the federal Small Business Administration has already approved Pennsylvania’s disaster declaration, which allows small businesses and private non-profits to apply for an SBA Economic Injury Disaster Loan (EIDL) online at https://disasterloan.sba.gov/ela.
That’s crucial for businesses looking to get funding from the stimulus package, since the funds come from the U.S. Treasury, said Jeff Barber, president of Lehigh Financial Group in Allentown.
The loan amounts are going to be anywhere from $10,000 to $2 million as of March 24, Barber said, who attended an SBA webinar on the topic.
The loans are for a 30-year timeframe, with a 3.75% interest rate for for-profit businesses and 2.75% for nonprofit business entities, he said.
To get funding from the stimulus package, businesses must apply through the SBA’s disaster loan site.
“The SBA is going to play a vital part in this economic recovery,” Barber said.
In addition, the SBA will offer a one-year deferment on the 30-year loan. Furthermore, the loans have a 90% guarantee, which means they only have a 10% exposure rate, he added.
However, if business owners have defaulted on any federal loan in the past, the SBA would reject them, he said.
Overall, Barber said the stimulus package would be helpful for businesses throughout the nation.
“Any type of economic stimulus is going to help any business owner,” Barber said. “It’s definitely a great start. Every day that goes by, there’s deterioration in the marketplace. This economic stimulus package is going to dwarf what they did for the banking system. We have to get small businesses back to some sense of normalcy.”