SBA Disaster Loans Would be Made Available for Virus-Impacted Firms
WASHINGTON, D.C. – Rep. Grace Meng (D-NY), the First Vice Chair of the Congressional Asian Pacific American Caucus (CAPAC), Rep. Nydia M. Velázquez (D-NY), the Chairwoman of the House Small Business Committee, and Rep. Judy Chu (D-CA), the Chairwoman of CAPAC, have introduced legislation aimed at assisting small businesses that suffer economic harm from the coronavirus outbreak.
“Small businesses are the backbone of our economy in Queens and throughout New York City,” said Meng. “They enhance our neighborhoods, bring investment and innovation to local communities, and provide jobs to area residents. But concerns about the coronavirus have hit many small businesses hard. In fact, I have heard from many Asian American-owned small business owners in my district that they are severely struggling. We cannot let them suffer. Government must be a strong partner in helping small businesses succeed and we must not abandon them in their time of need. I call on all my colleagues to immediately pass this legislation so that our entrepreneurs and small businesses can get back on track. When small businesses succeed, America succeeds!”
“Small businesses around the country and in New York City are beginning to feel the economic effects of the coronavirus,” said Velázquez. “Many of our Asian-owned businesses in New York have already experienced a decline in sales due to misinformation, fear and stigma associated with the virus. The bill we’ve authored will help businesses access federal loans if they suffer losses related to the outbreak.”
“The spread of COVID-19 has nothing to do with race or ethnicity, but that has not stopped dangerous misinformation and xenophobia from spreading faster than the disease itself,” said Chu. “In my district, some Asian-owned businesses are reporting a 50% drop in customers, and that’s the case elsewhere around the country as well. For instance, in New York City, before there was even a single case of COVID-19, some restaurants saw as much as an 80% decline in customers. We have even seen instances of illegal, fraudulent letters that baselessly urge people to avoid Asian-owned businesses. These are serious losses that can have long-lasting impacts on our local economies. We cannot let misinformation and fear ruin communities and businesses. This bill would help by providing necessary assistance to help our Asian-owned businesses continue to operate in the face of a disaster they had no control over.”
Economists recently lowered the global forecasts for major economies from 2.6 percent to 2.4 percent. Much of the recent slowing of the economy is linked to the coronavirus, which has weakened demand in travel and tourism. Besides the decline in foot traffic for many retailers and restaurants, particularly those in Chinese communities, small firms have experienced challenges related to their supply chains. Companies sourcing products and services from China have had delays or complete cancellations of orders, resulting in lower profits for the company. Besides these challenges, small firms must start the process of preparing their companies for the potential to have employees become infected and remain home or telework. In many instances, a small employer may be unable to absorb the additional workforce reductions without a coinciding loss in productivity.
Under the bill, the “Small Business Relief from Communicable Disease Induced Economic Hardship Act,” small businesses would be able to access Economic Injury Disaster Loans of up $2 million to help meet financial obligations and operating expenses, which would otherwise have been met if it were not for the virus’ spread. The bill specifies that the loans would be interest free. Companies that are major employers could be potentially eligible for larger loans.
“Properly preparing for the impact of the coronavirus requires a multi-front strategy and that includes being ready to address the very real economic fallout we may see,” Velázquez added. “This legislation would be a good first step to help our small firms in New York and around the nation who sustain economic injury from COVID-19. I look forward to working with my colleagues to advance this measure.”
A copy of the bill is online here and a bill summary is available here.