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Businesses: Will SBA loans arrive in time?
Struggling businesses say they need help fast to survive the economic slowdown from the COVID-19 outbreak.
HOUSTON - Struggling businesses say they need help fast to survive the economic slowdown from the COVID-19 Coronavirus outbreak.
The U.S. Small Business Administration has announced it will offer low-interest disaster loans. But many businesses worry the money won't arrive in time to save them.
Three Brothers Bakery is run by a family of survivors.
"The three brothers survived the Holocaust. We've been through four floods a fire and a hurricane. We've survived everything. This one could test us though," said Janice Jucker, co-owner of Three Brothers Bakery.
Jucker says some orders for their breads and sweets are already being canceled.
"I was looking when I got in, canceled, canceled, canceled," she told us.
Unloading heavy stacks of paper from a suitcase, Jucker showed us how much paperwork she says it took to secure SBA disaster loans after the bakery was flooded from hurricanes Ike and Harvey.
She says the SBA staff was always helpful, but she worries many businesses don't know how much information they'll need to gather to apply for a disaster loan.
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"They need partnership papers, they need any contractual obligations, they need your leases," she recalled of additional documents she was asked to provide.
She worries securing the loans and the disbursements could take too long to save some businesses after she experienced delays on her loan disbursements.
"We did not get a disbursement and I'm patiently waiting and we're going to have another credit card bill due, which was $144,000," she recalled, saying she had to ask her Representative to intervene to get her check.
The U.S. Chamber of Commerce echoed those concerns in a letter to the White House and Congress this week.
The S.B.A. announced this week it is relaxing the state certification process to speed up the loans.
In a statement to FOX 26, the SBA also tells us, "The SBA’s Office of Disaster Assistance will be strengthening its disaster loan processing operations nationwide to assist business owners facing Coronavirus-related economic injury. Once the SBA receives an Economic Injury Disaster Loan application from a small business, it can typically take up to two to three weeks to make a loan decision. If the loan request is approved, the SBA can make a disbursement within five days of receiving the signed loan closing documents."
Meantime, Jucker is urging lawmakers to provide Small Business Emergency Bridge Loans like the state of Florida does. These are interest-free loans to bridge the gap until a business secures longer-term help, such as an SBA loan.
"This one, of all the disasters, this one really worries me," said Jucker.
Governor Abbott has requested the emergency designation to enable Texas businesses to apply for SBA disaster loans. If the SBA approves the request, businesses can begin applying for loans up to $2 million.