Trump administration officials vow to launch a massive new loan program for small businesses by Friday in a frenetic effort to prevent them from laying off workers or going out of business as the coronavirus pandemic shuts down large segments of the economy.
The $2 trillion bipartisan financial-rescue package signed by President Trump two days ago includes $350 billion in desperately needed relief for small-company operators whose sales have plunged or whose businesses have been ordered closed. Many could fail if the widespread disruptions to the economy persist for more than a month.
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The size of the loans are largely conditioned on how many workers a small business retains or rehires. Those with fewer than 500 workers can apply for up to $10 million in loans to pay employees, cover rent and meet other costs for up to two months. The loans would be entirely forgiven for small companies that meet government requirements.
“So we encourage people to do that and get them back to work,” said U.S. Treasury Secretary Steven Mnuchin said in an interview Sunday on the CBS program “Face the Nation.”
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Mnuchin and the president’s top economic adviser, Larry Kudlow, both said on Sunday they intend to start the emergency loan program on Friday, an ambitious timetable for a government whose response during the coronavirus crisis has at times been tardy.
The White House is working with the Federal Reserve and the Small Business Administration to set up the program, accelerate the approval process and start doling out the money. Details are still being worked out.
By and large, the loans would be available to businesses with fewer than 500 workers that keep workers on their payrolls. Companies that have laid off employees would still be eligible if they rehire them, though the amount of money available would depend on how many they kept employed.
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Asked how long the crisis would persist, Mnuchin and Kudlow were noncommittal.
“It’s hard to predict anything,” Mnuchin said. “We want to get people back to work as quickly as we can, subject to medical conditions.”
This article originally appeared on MarketWatch.
