U.S. Treasury Secretary Steven Mnuchin and Small Business Administration Administrator Jovita Carranza announced guidelines for a $350 billion virus relief program for small firms at the Trump administration's daily briefing on the coronavirus outbreak.
Mnuchin announced that interest rates on small business loans would be lifted to 1% from 0.5% after lenders had complained about the initial terms of the virus relief measures.
Small U.S. businesses can start applying Friday for a new loan program meant to help them survive the devastating impact of the coronavirus outbreak. Lenders had said they lacked guidance on how to complete the loans, including what documentation is required from borrowers and how to verify it.
The $2 trillion stimulus package signed by President Donald Trump on March 27 includes the Paycheck Protection Program. It allows small businesses to apply for loans of as much as $10 million with payments deferred for six months.The loans, which are guaranteed by the federal government and don't require collateral, will be forgiven if funds are used for payroll costs, mortgage interest, rent and utility payments for two months and if businesses retain and rehire employees.A senior administration official, speaking on condition of anonymity, told reporters on Tuesday there could be millions of applications when the program goes live on Friday, with the idea funds would be disbursed quickly _ even the same day _ on a first-come, first-served basis.
But lenders complained it wouldn't be possible to process the loans that quickly without having more guidance from SBA, and they were awaiting more information.
