Federal financial aid for Hawaii small businesses affected by COVID-19 has grown to just over $3 billion, according to new U.S. Small Business Administration data.
The tally includes $542 million in loans for 8,884 Hawaii businesses from a SBA economic disaster assistance program, and $2.465 billion for 23,786 Hawaii businesses from the agency’s Paycheck Protection Program approved as of Friday.
These figures represent loan approvals, through which loan proceeds have been distributed in many, but not all, cases.
In recent weeks the amount of money approved for PPP loans for Hawaii businesses has actually declined, and as of Friday was $68 million less than the $2.533 billion reported as approved through May 8.
The drop reflects changes to loan amounts as well as loan withdrawals and approval cancellations, including cases where some residential condominium associations aimed to cover the maintenance of their property with PPP loan proceeds despite not being qualified nonprofits under program rules.
The U.S. Treasury Department has refused to disclose names of PPP loan recipients despite the loans being taxpayer-funded public subsidies and the discovery that some billion-dollar companies obtained loans.
PPP loans were created to help businesses with fewer than 500 employees keep paying their workers amid the economic fallout caused by the coronavirus pandemic.
These loans up to $10 million can be forgiven if a borrower spends at least 75% of proceeds to pay employees over eight weeks, and the balance can be spent on rent, mortgage interest and utilities.
An initial $349 billion allocated for PPP was depleted in April after just 13 days. Congress approved another $310 billion for the program that became available in late April.
As of Friday, $130 billion remained available.
In a separate SBA assistance program, $91 billion has been approved for 1.33 million small businesses nationwide, including $542 million in loans for 8,884 Hawaii businesses.
This initiative, the Economic Injury Disaster Loan Assistance Program, provides loans up to $2 million that can be used to pay fixed debts, payroll and other bills that can’t be paid because of a disaster’s impact.
Such loans for Hawaii businesses became available in March after Gov. David Ige declared a disaster because of COVID-19.
“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 at the time.
On Monday the SBA reopened the EIDL program to new applicants hurt financially by COVID-19.
“The SBA is strongly committed to working around the clock, providing dedicated emergency assistance to the small businesses and nonprofits that are facing economic disruption due to the COVID-19 impact,” SBA Administrator Jovita Carranza said in a statement.
“Since EIDL assistance due to the pandemic first became available to small businesses located in every state and territory, SBA has worked to provide the greatest amount of emergency economic relief possible,” Carranza said.
Interest rates for these loans are 3.75% for small businesses without credit available elsewhere, and the interest rate for nonprofits is 2.75%. Repayment terms can be up to 30 years.
A related SBA grant program that also was reopened Monday offers up to $10,000 to businesses affected by the pandemic.
The SBA reported disbursing $65 million in such grants for 20,773 Hawaii businesses as of Friday.
Nationally, $10.7 billion of such grants have been given to 3.2 million businesses.
These grants are referred to as emergency advances under the Economic Injury Disaster Loan Assistance Program. However, the advance does not have to be repaid, and recipients don’t have to be approved for a loan to receive the advance.