Federal loans available to Hawaii small businesses suffering from coronavirus crisis, Gov. David Ige says

Gov. David Ige and Small Business Administration District Director Jane Sawyer announced several initiatives today to try to help small businesses to stay afloat, quickly retrain workers and help workers who lose their jobs in the fallout from the spread of the coronavirus.

The SBA today approved a certification request from Ige, which clears the way for Hawaii small businesses to tap the SBA’s Economic Injury Disaster Loan Assistance Program. The loans of up to $2 million can be used to pay fixed debts, payroll and other bills that can’t be paid because of a disaster’s impact.

“Small businesses are a vital economic driver in our community, and we must do everything we can to support them as they struggle through this crisis,” Ige said in a written statement. “We appreciate the SBA’s quick action to approve this loan program for small businesses that have been hit so hard by COVID-19 outbreak.”

Interest rates for the loans are 3.75 percent for small businesses without credit available elsewhere, and the interest rate for nonprofits is 2.75 percent. Loan forms and additional information can be accessed online at the SBA’s Disaster Assistance Loan Portal. Terms are determined on a case by case basis, based upon borrower’s ability to repay.

According to an analysis by the state Department of Business, Economic Development and Tourism, there are 8,302 businesses in Hawaii with 99 or fewer employees. Those businesses account for 96,189 jobs with a combined annual payroll of $3.16 billion.

In a related development, Ige and Department of Labor and Industrial Relations Director Scott Murakami announced state actions to address unemployment claims filing problems and a program to efficiently train and transfer labor into Hawaii’s businesses to help reduce job losses.

New unemployment filings overwhelmed the state system on Wednesday, and the state is expanding the online claims filing system capacity and increasing the phone facilities to field inquiries, in part by shifting staff from other state programs to facilitate claims filing and processing, according to the announcement.

Benefits will be paid to those who file their initial unemployment claims late, and “the state will interpret Hawaii’s unemployment laws to the broadest extent possible to cover those who are out of work because of COVID-19,” according to Ige and Murakami.

“Please be assured that we are taking the actions necessary to ensure that all unemployment benefits claims will be filed and paid as quickly as possible. Please bear with us as we develop capacity and expand points of entry for filing claims,” Ige said in the statement.

The state will make adjustments loosen eligibility requirements for claimants and reduce or eliminate experience rate adjustments for employers because of employees who receive unemployment benefits because of COVID-19, according to the statement.

Ige and Murakami also announced the launch of a program called Reducing Unemployment Disruption & Driving Economic Regeneration, or RUDDER, to support private hiring during the crisis.

The program will provide up to $100,000 of relief to Hawaii businesses for new employees hired after March 1, including an initial $500 payment for each new employee to offset training costs, and a second payment for each employee for workers who are retained for six months of continuous employment.

“The primary objective of RUDDER is to facilitate an efficient labor exchange between the sectors hardest hit by COVID-19 and health care sector employers hiring employees to combat COVID-19,” said Murakami. “We know that jobs involving cleaning, such as hotel housekeepers, could move into jobs in the health care with minimal training and the RUDDER program will facilitate that exchange.”

The DLIR has posted a COVID-19 Workplace Updates page to provide additional information.