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.