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DENVER — State officials are in the process of asking the Small Business Administration to declare Colorado a disaster area from the spread of the COVID-19 virus, a key move that could unlock billions in emergency loans for small and medium-sized companies.
How often have you started to write a memo on policy updates, an annual report or even an email only to find yourself staring at a blank screen? Many professionals struggle to get started writing — even though they have a general idea of what they should say, they don’t know what to say first.
President Donald Trump freed up $50 billion in federal funds for the virus response last week, while $20 million of Congress’ initial $8.3 billion spending package would go directly to the SBA’s disaster loan program.
The loans are available for businesses located in areas specifically designated as disaster sites by the administration. They are capped at up to $2 million per eligible company and carry a rate of 3.75 percent for businesses and 2.75 percent for non-profit groups.
Ten states have received that designation for COVID-19 spread, including California, Washington and New York.
As of Tuesday, Colorado is not on that list.
Mike O’Connell, director of the Larimer County Small Business Development Center, told BizWest those loans are critical for small businesses that may have trouble securing a line of credit from a private sector lender.
“The banking institutions …They’re going to look at your ability to repay it, they’re probably going to want to make sure you’re not being too optimistic with some of your future revenue projections,” he said. “With the situation going forward like this, which nobody can predict, they’re probably going to have to look at this thing with some scrutiny.”
O’Connell suggested that interested business owners should gather three years worth of business and personal tax returns and financial statements before applying.
Glenn Plagens, director of business support and rural prosperity for the Colorado Department of Economic Development and International Trade, told BizWest in a prepared statement that the state is currently collecting documented cases of economic harm to submit to the SBA.
“Given COVID-19’s impact on the entirety of the state, it was essential to engage counties across Colorado to secure documentation that allows Gov. Polis to advance all of the state as a disaster area,” he said.
However, it’s unclear how soon the SBA could make a disaster declaration or how quickly capital would be made available to Colorado businesses. A spokeswoman for the SBA did not respond to requests for comment Monday and Tuesday morning.
Those loans could be a lifeline to the state’s in-person service businesses after Gov. Jared Polis ordered a 30-day ban on serving dine-in customers Monday. The loans could help businesses keep front-of-house employees such as waiters and bartenders on the payroll.
At a press conference Monday, Polis said Colorado would expand its unemployment insurance for temporarily laid off employees and to cover wages from employees whose hours were cut.