Small busi­nesses in US seek $5.4bn in re­lief loans

Kuwait Times - - Business -

WASHINGTON: Small and medium-size US busi­nesses have ap­plied for more than $5.4 bil­lion in gov­ern­ment-backed loans as a key pil­lar of the coun­try’s coro­n­avirus re­lief plan took ef­fect, the Trump ad­min­is­tra­tion said. Jovita Car­ranza, who heads the fed­eral Small Busi­ness Ad­min­is­tra­tion, said late Fri­day on Twit­ter that 17,503 com­pa­nies-those with 500 or fewer em­ploy­ees-had filed ap­pli­ca­tions through lo­cal banks for loans to­tal­ing more than $5.4 bil­lion. Fri­day was the first day the com­pa­nies were able to ap­ply for the money, in­tended in large part to help them pay em­ploy­ees’ salaries. The loans, which could even­tu­ally to­tal $350 bil­lion, con­sti­tute a cen­tral part of the $2.2 tril­lion coro­n­avirus re­lief plan adopted by Congress and then signed into law by Pres­i­dent Don­ald Trump on March 27.

“I will im­me­di­ately ask Congress for more money to sup­port small busi­nesses... if the al­lo­cated money runs out,” Trump tweeted Satur­day. But things were “so far, way ahead of sched­ule,” he said, adding that Bank of Amer­ica and com­mu­nity banks “are rock­ing!”

On Fri­day, most ap­pli­ca­tions were sub­mit­ted to lo­cal banks. Some of the big­gest US banks said they had en­coun­tered dif­fi­cul­ties with ad­min­is­tra­tive pro­ce­dures, al­though Bank of Amer­ica re­ported that it had pro­cessed tens of thou­sands of ap­pli­ca­tions by the end of the day.

Trea­sury Sec­re­tary Steven Mnuchin told the Fox Busi­ness Network that “our ex­pec­ta­tion is start­ing next week” all big banks would be ready. Com­pa­nies that re­ceive the money and do not fire their work­ers-or that oth­er­wise re-hire those they have laid off-will have their debt for­given.

The funds are in­tended to help hun­dreds of thou­sands of res­tau­rants, hair sa­lons and other small- and medium-size busi­nesses pay wages and rent for eight weeks, al­low­ing them to keep staff on the pay­roll dur­ing virus-en­forced clo­sures. “If we run out of money we’re go­ing to go back to Congress and get more money,” Mnuchin said. “This is a great, great pro­gram with bi­par­ti­san sup­port.”

But Mnuchin said he was work­ing with key bank ex­ec­u­tives to iron out any kinks and ex­pected the largest banks to be tak­ing part in the com­ing week. Mnuchin also said money trans­fers to house­holds would start within two weeks, down from the pre­vi­ously es­ti­mated three weeks. A fam­ily of four can re­ceive up to $3,000 un­der the larger re­lief pack­age. The first eco­nomic ef­fects of the cri­sis struck across the United States in March, when 701,000 jobs were lost. The un­em­ploy­ment rate rose to 4.4 per­cent. —AFP

WASHINGTON, DC: Trea­sury Sec­re­tary Steven Mnuchin speaks in the press brief­ing room with Pres­i­dent Don­ald Trump, Vice Pres­i­dent Mike Pence and Small Busi­ness Ad­min­is­tra­tor Jovita Car­ranza dur­ing the Coro­n­avirus Task Force brief­ing on Fri­day in Washington, DC. —AFP

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