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Small businesses could get interest-free disaster loans under bill

Updated March 20, 2020 - 12:02 pm

WASHINGTON — Small businesses in Nevada and other states that are suffering from an economic downturn caused by the coronavirus outbreak would get some relief with legislation filed Friday by two Democratic senators.

Sen. Catherine Cortez Masto, D-Nev., and Sen. Bob Menendez, D-N.J., filed the bill to make available interest-free disaster loans to small businesses in states like Nevada that have put restrictions on operations that have caused a decline in customers and profits.

“Nevada’s small businesses need relief from the economic effects of the coronavirus pandemic, and they need it now,” Cortez Masto said.

The Small Business Administration this week approved Nevada’s disaster declaration that allows companies and mom and pop operations across the state to access Economic Injury Disaster Loans from the SBA at a lower, 3.5 percent interest rate.

Under the bill filed by Cortez Masto, those disaster loans of up to $2 million would be interest-free, saving small businesses struggling during the coronavirus outbreak significant amounts of money, she said.

“Offering interest-free disaster loans during a public health crisis is just common sense,” Cortez Masto said.

The loans would not only help small businesses in the state, but protect “the millions of workers they employ,” she said.

The Senate bill is a companion to legislation filed earlier this month in the House by Rep. Nydia Velazquez, D-N.Y., chairwoman of the Small Business Committee.

The proposals by Velazquez, Cortez Masto and Menendez are separate from a $300 billion package the White House and Senate Republicans are trying to finalize to help small businesses make payroll and keep workers employed.

Those federally backed loans would be distributed through banks and other financial institutions to help businesses immediately meet operating expenses. If workers are retained through the loan programs, the loans could be forgiven, according to Sen. Marco Rubio, R-Fla., the chairman of the Small Business and Entrepreneurship Committee.

Rubio has backed disaster loan legislation, as well as the overall loan package for small businesses that Republicans are writing.

The nation’s governors have asked that the $300 billion in small business loans be distributed through the states, which they argue can process the funds faster.

Republicans are cobbling together a $1 trillion economic aid package related to the coronavirus that lawmakers hope to complete this weekend.

It would contain the $300 billion package for small businesses, as well as $500 billion in cash handouts to individuals, $50 billion in aid to the airline industry and $150 billion in loans for other industries, like hospitality, harmed by the coronavirus outbreak.

The Senate bill, if passed, would go to the Democrat-controlled House, where leaders have said they want to make the overall package less corporate friendly and provide more aid to families, workers and small businesses hard hit by the global pandemic.

Contact Gary Martin at gmartin@reviewjournal.com or 202-662-7390. Follow @garymartindc on Twitter.

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