Loans available for local businesses affected by COVID-19; Austin may boost support

Austin
Business owners boarded up their stores and bars on Sixth Street March 19, 2020 (KXAN Photo/Frank Martinez)

Business owners boarded up their stores and bars on Sixth Street March 19, 2020 (KXAN Photo/Frank Martinez)

AUSTIN (KXAN) — Texas small business owners can apply for up to $2 million in loans with the SBA Disaster Assistance Loan Program. The funds are available due to the state’s recent federal disaster declaration.

The City of Austin will meet next week to provide extra financial assistance for local small business owners.

Small businesses, private non-profits, homeowners and renters experiencing financial losses due to the COVID-19 pandemic and business restrictions can apply for help through the U.S. Small Business Administration (SBA) Disaster Assistance Loans.

“In anticipation of our city’s measured steps to contain the spread of COVID-19, our staff worked closely with county and state administrators, as well as our elected officials, to secure this resource for our community,” said City Manager Spencer Cronk. “We are excited that local small businesses and non-profits have another source of relief from the economic impacts of this pandemic, and we are continuing to evaluate other sources of support to respond to the needs of our local businesses and their employees.”

The up to $2 million loans are available to small businesses and private non-profits, at rates of 3.75% (for-profit) and 2.75% (non-profit) for terms up to 30 years on a case-by-case basis. The loans may be used to pay fixed debts, payroll, accounts payable and other bills that cannot be paid because of the disaster’s impact.

Information and online applications are available on SBA’s website.

If approved for the SBA, local, small businesses may have to wait four or five weeks to receive the funding. Austin City Council will meet March 26 to consider an emergency loan program for local, small businesses similar to SBA with a cap of $35,000.

This loan would serve as more immediate gap financing for small businesses waiting on SBA funds.

The City’s proposed plan would require a business to have at least two employees and no more than 100. Industrial, retail or distribution companies would be eligible, according to the city.

Local businesses are encouraged to check the City of Austin’s COVID-19 community resources page for more information.

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