Small businesses across Austin soon may be eligible for a local disaster loan program on top of the recently announced federal loan program, which city officials Saturday said would help the local economy survive the new coronavirus pandemic.
Veronica Briseño, Austin’s economic development director, said in an online public briefing Saturday that the Austin City Council Thursday will decide whether to approve additional support for local businesses by creating the local Economic Injury Disaster Loan Program.
For those approved, the loan program would work as gap financing in conjunction with an applicant’s request for federal assistance, Briseño said. The local program would provide working capital loans up to $35,000 to Austin businesses that demonstrate an economic injury associated with the new coronavirus.
In order to be approved, Briseño said the businesses likely would have to be within city limits and have two to 100 employees. However, City Council will have the authority to amend guidelines if the program is approved.
“We were looking at specifying industries,” Briseño said. “We would like them to be engaged in industrial, retail or distribution activities.”
Texas is one of the most recent states to receive a federal disaster declaration for the new coronavirus, officials said in a statement ahead of Saturday’s public briefing.
Small businesses, private nonprofits, homeowners and renters suffering financial losses due to the new coronavirus can apply for emergency financial assistance through the U.S. Small Business Administration (SBA) Disaster Assistance Loans, the statement said.
The SBA Disaster Assistance Loan Program provides loans up to $2 million for small businesses and private nonprofits at rates of 3.75% (for profit) and 2.75% (nonprofit) for terms up to 30 years on a case-by-case basis, according to the statement.
The federal loans may be used to pay fixed debts, payroll, accounts payable and other bills that cannot be paid because of the disaster’s impact, according to Briseño.
However, Briseño said it will likely take four to five weeks before a federal check is sent to business owners after an application is submitted.
“Which is exactly why we’re proposing this local program,” Briseño said. “We understand that creates a gap for small businesses and we want to create immediate funds to fill that gap.”
Information about the federal program eligibility and online applications are available on SBA’s website: disasterloan.sba.gov.
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