SAN DIEGO (KGTV) – Small businesses that accept the government in its low-interest loan proposal may not repay the money under certain circumstances.
As part of the coronavirus economic stimulus bill in Congress, the federal government would make more than $ 350 billion in low-interest loans of 2.75-3.75% available to many businesses in less than 500 workers. The loans would help employers who are suffering in the midst of the economic crisis to stay afloat in the short term.
In addition, for companies that maintain their payroll or meet certain hiring requirements, the government can cancel the loan entirely.
“This could be a vital safety net for many of these businesses that may close, and for their employees who may have no other source of income during this painful time,” said Lynn Reaser, chief economist at the Point Loma Nazarene University.
Small businesses and workers in San Diego have been hit hard by the epidemic.
The San Diego Workforce Partnership estimates that 350,000 employees could be made redundant, many from service sector jobs that do not have the option of working from home. These jobs are primarily in retail, accommodation and restaurants.
At French Gourmet in Pacific Beach, owner Michel Malecot says sales are down 90% and the restaurant and its restaurant business have lost $ 350,000. He saved $ 150,000 to keep the lights on and pay his suppliers.
“It’s like being a zombie,” says Malecot. “You are in the grave and nothing is really happening yet. Your gut is taking over and you have to try to make it happen.”
Malecot is initially optimistic about the loan program. He says many of his 80 regular employees are unemployed, but he is doing everything he can to be able to get started as soon as business picks up.