Local small businesses could get help through state disaster loans

By , Daily Memphian Updated: March 17, 2020 6:53 PM CT | Published: March 17, 2020 3:20 PM CT

Editor’s note: Due to the serious public health implications associated with COVID-19, The Daily Memphian is making our coronavirus coverage accessible to all readers — no subscription needed.

Small businesses in Memphis – and statewide – may soon get help from the U.S. Small Business Administration in the midst of the COVID-19 pandemic.

The SBA is working with Gov. Bill Lee to issue an Economic Injury Disaster Loan declaration this week for Tennessee, meaning small businesses that are significantly economically impacted by the coronavirus can apply for loans to help them fulfill operating and payroll expenses.


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“A lot of them (small businesses) are having to postpone catering events and supply orders are being canceled due to social distancing,” said Shawn McKeehan, SBA deputy district director for the Tennessee District Office.

A small business that applies for a disaster assistance loan could receive up to $2 million.

How much a business receives depends on several factors, including what they will use the funds for and if they meet certain credit requirements.

As of Tuesday morning, the SBA had issued the disaster assistance deceleration due to coronavirus for all or parts of six states: California, Washington, Maine, New Hampshire, New York and Rhode Island.

Small businesses will likely be able to start applying for those loans a day or two after SBA issues its declaration for Tennessee, McKeehan said.

On March 6, President Donald Trump signed the Coronavirus Preparedness and Response Supplemental Appropriations Act into law that allows the SBA to issue Economic Injury Disaster Loan declarations to governors that request them. McKeehan said he expects Lee to request the SBA declaration sometime on Tuesday, March 17.

“The SBA will continue to provide every small business with the most effective and customer-focused response possible during these times of uncertainty,” SBA Administrator Jovita Carranza said after the bill was signed into law.

As of Tuesday afternoon, there are 73 confirmed cases of coronavirus statewide and three in Shelby County.


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Locally, the coronavirus pandemic has resulted in local restaurants drastically changing the way they operate and all of them can expect revenue losses.

Most restaurants have closed their sit-in spaces following guidelines from the Centers for Disease Control and Prevention (CDC) that the public should avoid crowds of more than 10 people. 

Many restaurants, including those in the Cooper Young Business Association, have added curbside pickup, delivery and takeout services in response to the pandemic as more people practice social distancing and avoid large gatherings and spaces.

To assist restaurants, Memphis Mayor Jim Strickland announced Monday, March 16, in his daily coronavirus update the city will relax its enforcement of metered parking spaces in Midtown and Downtown and allow on-street parking at restaurants for customers for no charge.

“During this time, we strongly encourage you to continue to-go orders and support our local restaurants and their staffs,” Strickland said.

Small businesses in Memphis that successfully receive a Small Business Administration disaster assistance loan will pay an interest rate of 3.75%. Terms of the loan are determined on a case-by-case basis, based upon a borrower’s ability to repay the loan. The maximum length of the loan is 30 years.


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Nonprofits can also apply for SBA loans, and those would have an interest rate of 2.75%. Businesses that have credit with other entities are not eligible for a loan, McKeehan said.

More information is available at https://disasterloan.sba.gov/ela/ on how to apply for an SBA Economic Injury Disaster Loan. 

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Topics

small business small business administration COVID-19 Jim Strickland Cooper Young
Omer Yusuf

Omer Yusuf

Omer Yusuf covers Bartlett and North Memphis neighborhoods for The Daily Memphian. He also analyzes COVID-19 data each week. Omer is a former Jackson Sun reporter and University of Memphis graduate.


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