Thousands of small business loan applications from North Carolina businesses and pending, but state lawmakers are broadening the pool of applicants.
House Speaker Tim Moore said a proposal to help cash-strapped small business owners will be money well spent.
“This kind of loan is the difference between a business staying open or closing, between people having a job or not,” said Moore, R-Cleveland.
The House Committee on COVID-19’s Economic Support working group boosted funding for the state’s Small Business Emergency Loan program from $25 million to $75 million in a unanimous vote Tuesday, April 21. The extra money arrives as federal cash infusions dry up.
The bill will go before the House when the legislature convenes Tuesday, April 28.
A total of 4,037 North Carolinians have applied for Small Business Emergency Loans so far, said Kasey Ginsberg, director of government relations and director of programs for the Golden LEAF Foundation. More than 3,000 of those applications are pending, and the rest have either been approved or withdrawn.
The requests total $139 million, with the average request approaching $35,000, Ginsburg told the committee.
Originally, the legislation would have extended aid only to businesses with 50 or fewer employees. That policy would have excluded some small businesses, including restaurants with multiple venues that each employ fewer than 50 workers, but collectively employ more than 50, noted Rep. Stephen Ross, R-Alamance, a bill sponsor. Now, loans are prioritized to independently owned establishments with 100 or fewer full-time or equivalent employees.
Committee members also increased the maximum term on loans from 54 to 66 months. In addition, the new legislation bars against a duplication of state and federal benefits.
Meanwhile, small businesses already depleted much of the first round of money from the federal government. Congress’ nearly $350 billion Paycheck Protection Program, passed March 27 as part of the CARES Act, was designed to aid small businesses and cover employee paychecks. Those funds were exhausted last week.
The Economic Injury Disaster Loan program also pressed “pause” on applications. EIDL funds are often triggered by hurricanes, and many North Carolinians began to apply after March 18, when the U.S. Small Business Administration declared all 100 N.C. counties a disaster zone, said Thomas Stith, N.C.Small Business Administration district director. The program has since become overwhelmed by increased demand and limited funds.