FRIDAy, MARCH 27 , 2020. THE WASHINGTON POST eZ re A
the coronavirus pandemic
BY AARON GREGGThe U.S. Small Business Ad-
ministration, a 67-year-old federal
agency known primarily for the
mundane work of underwriting
bank loans, is suddenly being
called upon to help thousands of
small businesses weather the
worst economic crisis in at least a
decade.
The agency is grappling with a
sharp increase in interest in its
disaster assistance loans as the
coronavirus crisis delivers a gut
punch to bars, restaurants and
retailers across the United States.
It is working to set up call centers
to handle its current load of
20,000 to 30,000 calls per day, a
number the agency thinks will
jump to 60,000. A pending $2 tril-
lion aid package is expected to
significantly broaden its m andate,
putting it in charge of a new,
$350 billion loan program for
businesses with fewer than 500
employees.
“This is not your typical disas-
ter scenario where a flood or
hurricane impacts a fixed geo-
graphical area,” SBA regional
communications director Chris
Hatch s aid in an e mail. “Due to the
widespread impact of the corona-
virus, our emergency loans and
business counseling are in high
demand.”
Here is how small-business
owners can access the SBA’s re-
sources:
Q: Where can I apply for an SBA
disaster loan?
There are three ways. The SBA
operates an online portal where
you can upload business docu-
ments and apply for a loan. You
can also fill out the PDf docu-
ments linked on the agency’s
website, print them and mail
them to SBA’s processing and
disbursement center at 1 4925
Kingsport rd., fort Worth, TX
76155 -2243. The agency’s forms
say applicants can also submit
forms in person at an SBA disas-
ter center, but which locations are
open is unclear.
Q: Who qualifies for these
small-business loans?
Businesses in any U.S. state
that have fewer than 500 employ-
ees and are unable to pay their
bills because of the coronavirus
pandemic.Q: How long will the loan pro-
cess take?
After you submit an applica-
tion, the SBA will review your
credit before conducting its own
inspection to verify your losses.
This includes reviewing any in-
surance recoveries you may have.
The agency can issue you a loan
while recoveries are pending.
The SBA says its goal is to arrive
at a decision on any disaster loan
within two to three weeks. If it
determines you are eligible, it will
send you a loan closing document
for your signature.
An initial disbursement of
$25,000 will arrive within five
days, according to SBA informa-
tional materials. The rest of your
loan will be disbursed on a sched-
ule until you receive the full
amount. The schedule will be set
by an SBA loan officer whose job
is to ensure you meet all the loan
conditions.Q: How much can I get through
an SBA disaster loan?
Small businesses, small agri-
cultural cooperatives or private
nonprofit organizations can bor-
row up to $2 million for “econom-
ic injury,” meaning the organiza-
tion cannot pay its ordinary and
necessary operating expenses be-
cause of the coronavirus pandem-
ic. President Trump has declared
the coronavirus pandemic a na-
tional emergency.Q: What will the interest rate be?
Interest rates on these loans
are 3.75 percent for small busi-
nesses and 2.75 percent for non-
profits.Q: What information will I be
asked to provide?
Loan applicants are asked to
provide a transcript of their mostrecent tax returns and a tax infor-
mation authorization form, a de-
tailed accounting of personal as-
sets, sources of income and un-
paid taxes. Those additional
forms and instructions are posted
on the agency’s website. You will
also have to include names and
personally identifiable informa-
tion for all proprietors, partners
or stockholders who own at least
20 percent of the business.
Nonprofit organizations can
substitute tax returns for the or-
ganizations’ IrS tax-exempt cer-
tification along with complete
copies of the organizations’ state-
ments of activities.
There are criminal penalties
for submitting false information.Q: What if I haven’t filed taxes
yet?
In lieu of a tax return, the SBA
asks for a year-end profit-and-
loss statement and balance sheet
for that tax year.Q: What if I can’t get into the
website? I heard there are prob-
lems with it.
There have been periodic out-
ages on some parts of the SBA’s
website as the agency reports
“unprecedented” volume on its
disaster loan site. The surge in
Web traffic has overwhelmed
some of the agency’s systems and
caused some applicants to see
error messages.
The agency said it is working
on improvements to its site that
will allow it to handle the extra
traffic. “over the last day, im-
provements were made to the
website, and it is now back up
and running,” an agency spokes-
man said Thursday afternoon,
after some users complained of
outages.
“We continue to work with our
federal and private-sector part-
ners to improve capacity, and we
appreciate the patience of our
small-business community as we
move forward to assist small
businesses across the nation,”
said Hatch, the SBA spokesman.
[email protected]Need a f ederal disaster relief loan
for s mall business? Things to know.
rent on all its properties across
the nation, and many business
owners say they might do the
same because government aid
probably won’t arrive in time for
April 1 payments.
Another warning sign is com-
panies starting to slash pay. o cci-
dental Petroleum is cutting all
U.S. worker salaries by 30 per-
cent, and smaller businesses say
they are considering something
similar, figuring it is better than
layoffs. Wages had been rising
steadily i n recent y ears, but these
pay reductions are another way
this crisis is rapidly changing the
economy’s trajectory and proba-
bly m aking it harder for p eople to
bounce right back to their previ-
ous spending levels, even if they
kept their job.
Next week and the following
week’s unemployment claims
numbers are also likely to be
telling. While 3.3 million new
benefit applications last week
was a shocking figure, it repre-
sents only a small fraction of the
number of people whose jobs
have been cut in this flash reces-
sion so far.
Pam massey, a hairdresser in
Gig Harbor, Wash., hasn’t cut
anyone’s h air since march 1 3. Her
income has disappeared, but she
has not been able to apply for her
state’s unemployment benefits
because she is technically self-
employed. Gig workers, self-
employed and people who have
worked for only a few months
typically aren’t eligible to get
jobless aid from the government.
The Senate bill greatly ex-
pands who can get benefits to
include self-employed workers
like massey, but she has lost half
a month of income and has to
wait for the House to pass the bill
and her state to implement the
change.
“I worried about my m ortgage.
I’m trying to get ready for retire-
ment. This is going to kill it,”
massey said. “But i f we don’t s top
the virus now, it will continue for
God only knows how long. Let’s
take the suffering upfront.”
[email protected]Alyssa Fowers and Andrew Van Dam
contributed to this report.bracing for more if the situation
doesn’t improve soon.
michigan is one of 21 states
that has told all nonessential
employees to stay home. De-
Henau’s business was founded in
1946 by his grandfather, and he
doesn’t want to let the legacy
down.
“The smaller the firm, the
more damage this is going to
cause,” said Joseph Brusuelas,
chief economist at rSm, an audit
firm that specializes in midsize
companies. “What we’re hearing
from smaller customers is for
some of them it is too late.”
Brusuelas is also watching the
commercial real estate market
closely as a good indicator of
whether the downturn is turning
into something that will be hard
to bounce back from. T he Cheese-
cake factory has stopped payingand tools.
Despite all this, business is
down 40 percent from where it
was this time last year. Custom-
ers call and cancel at the last
minute. Supplies from Asia have
dried up, and sometimes deliver-
ies can’t be made from suppliers
or to his customers as trucking
companies don’t have enough
healthy drivers or capacity.
“The covid-19 thing has really
thrown a wrench in us sideways.
We’re not one o f those companies
that has a lot of cash reserves,”
DeHenau said. “We’re day by day
here. It’s a lot of restless nights.”
DeHenau tried to apply for a
Small Business Administration
loan this w eek, but the site w as so
busy he m anaged to only get a
login created before it froze. So
far, he’s had to lay off only one of
his 3 0 employees, but everyone isfinances.
Even in businesses that are
considered “essential” and re-
main open, life has changed dra-
matically. Scott DeHenau, who
runs an industrial packaging
co mpany called Pak-rite in Wix-
om, mich., says his firm is open
because it does work for the
medical and defense industries.
But he almost wishes it was
closed.
All employees h ave their tem-
perature tested on the way into
the warehouse. DeHenau has had
lengthy discussions with each
worker about whether they
should take the health risk of
coming to work. They now run
two shifts and mandate that em-
ployees stand about 10 feet from
one another. Between the shifts,
they sanitize the entire facility —
doorknobs, surfaces, bathroomsolive Garden parking lot, where
she commiserated with another
laid-off cook, who had also come
to the restaurant because she
couldn’t b elieve the l ayoffs either.
They sat in their cars with their
windows rolled down trying to
understand how this boom-to-
bust happened.
“It’s making me go into a
depression,” Bowens said. “I’m
worried if I’m going t o still h ave a
job. I’ve been at my job for
10 years.”
Bowens says she drove home
and spent hours applying for
Louisiana’s unemployment aid
because the website was so slow.
Newly jobless workers across the
country said in interviews that it
took hours, or d ays in some cases,
to apply last week because web-
sites were so slow or down com-
pletely.
When she initially applied,
Louisiana w as still requiring peo-
ple seeking jobless aid to prove
they were actively searching for
work, even in the pandemic. The
state has now waived that re-
quirement. Bowens and her hus-
band, a repair man, are both out
of work, but they have yet to
receive any payments. Bowens
just wants her old job back.
“I am not the sitting-at-home-
type person,” Bowens said. “I am
not just a line cook. I do set up.
Serving. Bartending. I can be the
host or the ‘to go’ specialist. I
have learned every job they
have.”
The average unemployment
benefit check is c urrently $385 a
week, less than half the typical
weekly paycheck in the United
States. The amount is slated to
rise an additional $600 a week
once President Trump signs the
relief bill into law, a substantial
increase meant to tide workers
over as they are forced to stay
home.
But there is concern whether
the money will arrive in time.
Some states have waived the
week-long waiting period before
the first payment goes out, but
others have not. Bowen’s hus-
band takes nine pills a day for
high blood pressure and other
conditions. He is rationing them
as the couple worry about theirStill, stocks soared Thursday,
with the Dow Jones industrial
average rising 1,352 points. U.S.
stocks capped off the best three-
day rally since 1931 amid opti-
mism that the economic carnage
will be mitigated by a $2 trillion
stimulus bill that is expected to be
passed by the House on friday.
The bill, which would give
most Americans checks worth
$1,200 or more and provide bil-
lions of dollars in low-cost loans
to businesses, received unani-
mous support in the Senate in a
vote late Wednesday. Economists
say the relief package is expected
to provide a lifeline to workers
and companies facing devasta-
tion, but it won’t stop a severe
recession nor be adequate to
sustain workers if the coronavi-
rus crisis lasts more than a
month or two.
“We all think of a recession as
having an economic underpin-
ning, but this has not a thing to
do with e conomics. This is literal-
ly about trying to stay away from
people,” said Aparna mathur, a
scholar at the American Enter-
prise Institute.
much of the nation has made
the gut-wrenching choice to stop
about half the economy and en-
courage most workers to stay
home in an effort to s ave as many
lives as possible. Although no
official figures exist yet, the un-
employment rate has already
ju mped to at least 5.5 percent,
said economist martha Gimbel of
Schmidt futures, a level not seen
since 2015 and up from 3.5 per-
cent in february.
“The most terrifying part
about this is this is likely just the
beginning of the layoffs,” Gimbel
said.
LaTo nua Bowens lost her job
at olive Garden in Shreveport,
La., a week and a half ago. S he got
the call from her boss as she was
coming out of Ta rget empty-
handed after an unsuccessful at-
tempt to find toilet paper and
sanitizer. Her boss told her to
apply for unemployment insur-
ance because no one knows how
long it will last.
Stunned, Bowens drove to the
economy from A
Virus spreads economic pain t o millions of U.S. workers
sTUArT IseTT For THe WAsHIngTon PosT
Pam massey, a hairdresser in Gig Harbor, Wash., hasn’t worked since march 13, but she hasn’t been
able to apply for her state’s unemployment benefits because she is technically self-employed.Take The Post for a run
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