WASHINGTON, D.C. – U.S. Senators Bob Menendez (D-N.J.), a member of the Senate Banking Committee, and Catherine Cortez Masto (D-Nev.) yesterday introduced legislation that would help small businesses recover from the economic downturn caused by the COVID-19 outbreak. In an effort to slow the spread of the virus, many states, such as New Jersey, have put restrictions on the operations of businesses, which have already caused a decline in customers and lower profits.
Yesterday, the Small Business Administration (SBA) approved New Jersey’s disaster declaration allowing small businesses across the state to access Economic Injury Disaster Loans (EIDLs) at a lower, 3.5% interest rate. The senators’ legislation would make these loans, up to $2 million, interest-free, saving small businesses struggling during the coronavirus outbreak significant amounts of money.
“Small businesses are the backbone of our economy and society and we must work to protect the owners and their employees,” said Sen. Menendez. “It’s unfortunate that we must take these aggressive measures of social distancing but it’s the only way we can flatten the curve and slow the spread of COVID-19. This bill would provide much needed relief and financial stability to the mom and pop shops along our country’s Main Streets. From the restaurants in Hoboken’s bustling downtown to the novelty stores along Ocean City’s boardwalk, we must ensure these businesses have the resources to recover from this economic downturn.”
“Nevada’s small businesses need relief from the economic effects of the coronavirus pandemic, and they need it now,” said Sen. Cortez Masto. “Offering interest-free disaster loans during a public health crisis is just common sense. I’m proud to cosponsor this legislation to protect not just our small businesses around the country, but also the millions of workers they employ.”
Under the “Small Business Relief from Communicable Disease Induced Economic Hardship Act”, small businesses would be able to access up $2 million to help meet financial obligations and operating expenses. Under current law, EIDLs are only available to businesses that are located in a declared disaster area and the spread of a communicable disease is not considered a disaster. Additionally, the bill specifies that the loans would be interest free.
The bill would allow small businesses affected by the COVID-19 outbreak to take advantage of EIDLs by:
Sen. Kristen Gillibrand is also cosponsoring the legislation. Congresswoman Nydia Velázquez (D-NY) introduced a companion bill in the House earlier this month.