A $10 million emergency fund set up to help small businesses struggling with the coronavirus pandemic stopped taking applications three days after its launch.
The Massachusetts Growth Capital Corporation, a quasi-public agency that works with banks and lenders, announced on its website Thursday afternoon that it would no longer accept applications “due to the availability” of Economic Injury Disaster Loan funds.
“We are no longer accepting applications to the Small Business Recovery Loan Fund at MGCC as of 12:30PM on March 19th, 2020,” the website states.
The Executive Office of Housing and Economic Development, which is working with the agency, declined to comment on why state loan applications were no longer being accepted.
Instead, the office said the administration was working on a loan fund while securing a disaster declaration from the U.S. Small Business Administration so companies in Massachusetts could apply for federal loans.
After Governor Baker’s request for a disaster declaration from the SBA, the SBA made assistance available through the Economic Injury Disaster Loan Program which went online on Wednesday evening.
Gov. Charlie Baker announced on Monday that the MGCC would administer up to $75,000 in capital to an eligible small business or nonprofit. The applicants must have fewer than 50 full-time and part-time employees to qualify.
“There’s no question everyone is feeling the impact of the coronavirus at this point,” the Republican governor said at the time. “It is certainly tremendously disruptive to our daily lives."
The MGCC and state officials have pivoted toward promoting the federal disaster loans now available by the Small Business Administration.
Massachusetts businesses can apply for disaster relief loans until Dec. 18. The SBA approved Baker’s request for disaster loan assistance on Wednesday on the grounds that the state experienced economic injury.
With the SBA relief, businesses without credit available elsewhere will be eligible for disaster loans of up to $2 million. The disaster loans would have a 3.75% interest rate for small businesses and 2.75% for nonprofits with a repayment period of up to 30 years.
A preliminary survey by the Massachusetts Emergency Management Agency on Monday suggested that at least 700 businesses across the state have been hit hard by the coronavirus pandemic and the restrictions issued during the state of emergency declaration.
Businesses across the private sector have been hit hard by the coronavirus response, from restaurants that can no longer serve food and beverages except for takeout to hotels, gyms, malls and other retail stores that have closed temporarily.
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