Small businesses as well as the self-employed in Hawaii can apply for newly created loans in the wake of the coronavirus pandemic from the Small Business Administration in April, according to U.S. Sen. Brian Schatz.
Small businesses and sole proprietorships can apply for the SBA Paycheck Protection Loan Program, created through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, starting Friday, to cover payroll and other expenses through existing SBA lenders.
Independent contractors and the self-employed can begin applying on April 10.
“This new loan program will help Hawaii small businesses meet their payroll and provide people with paychecks for up to eight weeks,” said Schatz in a news release. “It’s important that people apply as soon as they can to make sure they have the help they need to ride this out.”
Small businesses that apply are eligible for zero-fee loans of up to $10 million to cover payroll and other operating expenses.
Up to eight weeks of payroll, mortgage interest, rent, and utility costs can be forgiven, according to Schatz, but businesses should apply before May 5.
In addition, payments on principal and interest are deferred for six months up to one year and the interest rate on any part of the loan not forgiven has been set at 0.5% for two years.
Due to expected high demand, borrowers are encouraged to apply as soon as possible.
At the same time, the Chamber of Commerce of Hawaii has launched an online petition urging Gov. David Ige to help businesses struggling financially due to COVID-19 disruptions.
“We are willing to do our part to save lives,” says the petition. “We have stopped nonessential operations, made adjustments to keep essential functions running and stepped up to help others in need. However, these actions have come at a steep cost to the future of our business and our ability to employ our fellow Hawaii residents…While business has come to a standstill, our April bills and obligations remain. Many of us fear that we won’t be able to make good on these debts and will close permanently.”
The Chamber of Commerce of Hawaii has asked the governor to suspend or defer the General Excise Tax and other tax collections, as well as provide rental relief and mortgage assistance, or deferral of payments.
The chamber is also requesting that the state support or match loans for businesses who receive economic injury disaster loans from SBA.