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Business Other News 05 Apr 2020 US small businesses ...

US small businesses seek USD 5.4 billion in virus relief loans

AFP
Published Apr 5, 2020, 9:16 am IST
Updated Apr 5, 2020, 4:43 pm IST
Friday was the first day the companies were able to apply for the money, intended in large part to help them pay employees' salaries
Jovita Carranza, administrator of the Small Business Administration, speaks about the coronavirus in the James Brady Press Briefing Room of the White House n Washington, as Vice President Mike Pence, President Donald Trump listen. Millions of small businesses are expected to apply for a desperately needed rescue loan Friday, a stern test for a banking industry that has had less than a week to prepare for the deluge. Small businesses will be seeking loans from the $349 billion Paycheck Protection Program, which was put in place to help them retain workers and pay bills during the coronavirus pandemic. (Photo- AP)
 Jovita Carranza, administrator of the Small Business Administration, speaks about the coronavirus in the James Brady Press Briefing Room of the White House n Washington, as Vice President Mike Pence, President Donald Trump listen. Millions of small businesses are expected to apply for a desperately needed rescue loan Friday, a stern test for a banking industry that has had less than a week to prepare for the deluge. Small businesses will be seeking loans from the $349 billion Paycheck Protection Program, which was put in place to help them retain workers and pay bills during the coronavirus pandemic. (Photo- AP)

Washington: Small and medium-size US businesses have applied for more than USD 5.4 billion in government-backed loans as a key pillar of the country's coronavirus relief plan took effect, the Trump administration said.

Jovita Carranza, who heads the federal Small Business Administration, said late Friday on Twitter that 17,503 companies those with 500 or fewer employees had filed applications through local banks for loans totaling more than $5.4 billion.

 

Friday was the first day the companies were able to apply for the money, intended in large part to help them pay employees' salaries.

The loans, which could eventually total USD 350 billion, constitute a central part of the USD 2.2 trillion coronavirus relief plan adopted by Congress and then signed into law by President Donald Trump on March 27.

Companies that receive the money and do not fire their workers -- or that otherwise re-hire those they have laid off  will have their debt forgiven.

The funds are intended to help hundreds of thousands of restaurants, hair salons and other small and medium businesses pay wages and rent for eight weeks, allowing them to keep staff on the payroll during virus-enforced closures.

"If we run out of money we're going to go back to Congress and get more money," Treasury Secretary Steven Mnuchin told Fox Business Network on Friday. "This is a great, great program with bipartisan support."

On Friday, most applications were submitted to local banks. Some of the biggest US banks including the largest, JPMorgan Chase said they had encountered difficulties implementing the program and were awaiting guidance from the government.

But Mnuchin said he was working with key bank executives to iron out any kinks and expected the largest banks to be taking part in the coming week.

Mnuchin also said money transfers to households would start within two weeks, down from the previously estimated three weeks. A family of four can receive up to USD 3,000 under the larger relief package

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