Massachusetts will add another $10 million to help small businesses who sought emergency loans before the state was overrun with requests and stopped accepting applications, Lt. Gov. Karyn Polito said Friday.
The Mass Development Board of Directors will vote to appropriate the funds next week, doubling the total pool of money to $20 million for emergency small business loans, Polito said during a news conference in the State House.
The Small Business Recovery Loan fund was flooded with applications after the relief was announced to help businesses that had to close or cut hours in the wake of the coronavirus pandemic, Gov. Charlie Baker said. The Massachusetts Growth Capital Corporation, the quasi-public agency tasked with disbursing the funds, stopped taking applications Thursday afternoon.
“The reason the lieutenant governor talked about Mass Development appropriating another $10 million for the funds is because it was oversubscribed,” Baker said. “We’ll do the best we can to continue to deal with that on a go-forward basis.”
Baker first announced the $10 million Small Business Recovery Loan fund on Monday, saying that an eligible business or nonprofit could get a low-interest loan of up to $75,000.
While the MGCC will no longer accept new applications for the fund, state officials encourage small business owners who are struggling to apply for a federal disaster loan through the Small Business Administration. The federal agency approved Baker’s request for a declaration of economic injury, allowing Massachusetts businesses and nonprofits to apply for a federal disaster loan.
Small businesses and nonprofits who are eligible — those with under 50 full-time and part-time workers — can borrow up to $2 million from the federal government. The interest rate is 3.75% for eligible businesses and 2.75% for eligible nonprofits.
The state loan was meant to be a temporary measure to help businesses find relief while the state sought an economic injury declaration from the Small Business Administration, state officials say. With the declaration, the SBA can offer much larger loans to Bay State applicants who need them.
“The administration made the Small Business Recovery Loan fund available as a bridge vehicle while Governor Baker’s request for a federal disaster declaration was being processed,” Ryan Boehm, a spokesman for the Executive Office of Housing and Economic Development said in a statement. “Assistance is now available from the SBA through the Economic Injury Disaster Loan Program, and we encourage financially impacted small businesses and non-profits to apply for these low-interest loans to address disruption caused by the ongoing pandemic.”
Businesses across the state have been hit hard by the coronavirus pandemic and the subsequent restrictions on public life. In Baker’s request to the SBA, he noted that a preliminary survey by the Massachusetts Emergency Management Agency found earlier this week that at least 700 businesses were affected by the coronavirus response.
Massachusetts officials reported the state’s first death from the virus on Friday. At least 418 people in Massachusetts had the coronavirus as of Friday.
Sign up for free text messages about important updates on coronavirus in Massachusetts
Related Content:
- Coronavirus: Massachusetts Gov. Charlie Baker signs unemployment benefits bill, announces tax extensions for some small businesses
- Massachusetts’ $10 million Small Business Recovery Loan Fund stops taking applications after 3 days
- Massachusetts approved for federal disaster loan assistance from the Small Business Administration
- Coronavirus: No shelter-in-place order for Massachusetts at this time, Gov. Charlie Baker says