The billions of dollars in federal aid for small businesses impacted by the coronavirus will be routed through Montana banks and other lenders – and those institutions say they’re ready to roll.
“(The feds) want this money on the street immediately, after Congress approves and appropriates the funds,” Cary Hegreberg of the Montana Bankers Association told MTN News Thursday. “Banks know they are going to be the key link to make this whole thing work. And they’re ready, willing and able to do that.”
The U.S. House on Friday sent a $2.2 trillion rescue package to President Trump for his signature.
The bill includes $377 billion to help small businesses weather the economic storm brought on by the coronavirus pandemic, which has slowed customers to a trickle for many companies.
That money will be distributed, as zero-interest loans, through banks and other lenders certified by the U.S. Small Business Administration.
Hegreberg said if any business, including sole proprietors and contractors, or nonprofit has any questions about when and how the money will be available, they should contact their local lender as soon as possible.
“We’re encouraging people to work with their banks early on,” he said. “If you’re having trouble making payments, whether it’s a consumer loan or a small business loan, let your banker know up front.
“Let him know your circumstances, because the earlier you can work with your lender the better options you’re going to have, looking down the road.”
Small businesses are defined as those with less than 500 employees. The loans will be up to a maximum of $10 million per business and are meant to help companies hang on during the next few months.
“We see small businesses in every community that have been shuttered for weeks, and some that are operating on a very skeleton crew,” Hegreberg said. “These programs are about helping employers keep people on their payroll and keep people working, or at least keep getting paychecks, so the economy can continue to ripple.”
The loans also will transform into grants if the money is used to cover employee salaries, rent, paid leave for workers, utility payments, health-insurance premiums or other necessities and worker protections.
Loans to companies with tipped employees, such as restaurants and bars, also may be forgiven if the money is used to provide additional income for employees.
Hegreberg said he believes the money will be available on a first-come, first-served basis – but he’s not sure how fast it will arrive.
SBA officials have assured banks that the agency will “strip away the bureaucracy” that sometimes slows approvals of such loans, to get the money out quickly, he added.
“We’re trying to get banks to gear up, anticipate what’s going on, to help their borrowers get instant access to these emergency loans, Hegreberg said.