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More details on aid for Oklahoma businesses and nonprofits will be revealed as Gov. Kevin Stitt announced Friday night that the long-awaited application process with the Small Business Administration has begun and is ongoing.
Stitt said the loans could be used to pay off fixed debt, payroll, accounts payable and other bills that cannot be paid due to the impact of the disaster.
Cameron Brewer, vice president of SBA lending, said banks would not play an intermediary role with the Small Business Administration’s pandemic support, but lenders would be kept up to date on what businesses and nonprofits can expect.
“Oklahoma’s small businesses need these funds,” Brewer said, “both in the short term to weather this turbulent time and in the long term to maintain a healthy cash position while the economy recovers.”
Meanwhile, the Greater Oklahoma City Chamber on Friday released a survey showing a majority of large city businesses are feeling adverse effects from the new coronavirus pandemic, including nearly a fifth of respondents who say they are about to cut employees to dismiss.
Most types of businesses qualify for a support loan, including some that are not eligible for typical SBA-backed loans such as: B. passive real estate owners and non-profit organizations that sell a product. The company must be “small” according to SBA standards.
Brewer notes that the loans will have a 30-year term with an interest rate of 3.75%.
The loans are fully deferred in the first year with no payments due in the first 12 months.
The amount available to a borrower is primarily determined by halving last year’s gross profit, up to $500,000. If a borrower needs more than $500,000 and their gross profit calculation supports that, there is a slightly more complicated calculation that can allow for up to $2,000,000.
Funds are used for working capital needs related to business operations. This includes items that would normally be considered working capital i.e. payroll, rent, etc., but it can also include the payment of fixed debt obligations such as a mortgage payment, repayment of short-term or bridging loans made specifically for this purpose by lenders, and loans Card debt related to these economic circumstances.
Oklahoma Secretary of Commerce Sean Kouplen said the SBA is preparing to face the challenge of a statewide disaster. A 40,000-square-foot operation at the Market Place Shopping Center, 5537 Northwest Expressway that was scheduled to be vacated by FEMA is now scheduled to be handed over to the SBA after FEMA completed its response to last year’s flooding.
Brewer said previous disasters where help was requested directly from the SBA typically took three days for the request to be processed and 30 days for the payments to be distributed.
“This is unprecedented,” Brewer said. “So it’s hard to say if the turnaround time will be similar or if it will be the same as in the past.”
Help cannot come too soon for entrepreneurs.
The Chamber’s survey of 300 companies, conducted over 48 hours between Tuesday noon and Thursday noon, found many companies are limiting on-site operations or switching to remote work
“We know this is a rapidly changing situation and the impact will evolve,” said Chamber President Roy Williams. “This survey gives us a high-level view of the concerns our businesses faced as the emergency and significant closures were implemented. We expect to conduct a similar survey of Oklahoma City companies again next week to understand how they are progressing.”
According to the survey, 10% of respondents said their locations were closed.
The majority, 56%, responded that they were open with changed operations or limited hours.
Of those surveyed who were still in operation, only 25% were still working normally. Others limited building access only to their employees, some were working entirely remotely, and some were preparing for change.
A concern of operators who participated in the survey is the availability of resources and technical capabilities to enable remote work and the reality that many jobs cannot be completed remotely.
Only 3% of companies saw no change in their operations.
80 percent had lost business or expected to lose business as a result of the pandemic.
When asked about the support they need, many companies are aiming for a return to normal operations. They are also looking for financial support to bridge a loss of income.
“It is clear from this survey that this emergency could have a significant impact on our community,” Williams said. “Managers and owners are also concerned about the energy downturn and the impact it is already having on their revenues, so this is a second crisis to deal with.”
Business journalist Richard Mize contributed to this report