Podcast: Small businesses might look to SBA loans for a lifeline. It might not work. Get in line anyway

There many moving parts right now as Congress weighs legislation designed to help the economy during the coronavirus crisis. Small businesses — many in freefall, already closing and laying off all their staff — can’t wait for Congress to get its act together, and they don’t have to. The Small Business Administration is already taking applications for disaster loans, and many businesses should get in line for these low-cost, generous-term loans.

Below is my conversation with Gerri Detweiler, Nav.com’s director of education and one of the best at making money and credit simple for consumers and small businesses. Here are a couple of highlights, but you should listen to her explain it herself.

    • SBA loans are a good deal. Businesses won’t have to begin paying them back for a year, the rate is 3.75%, and terms can last up to 30 years.
    • Lending decisions might take 45 days. That’s the bad news. But the SBA hopes to fast-track the first $25,000 of a loan for each business, making that money available in less than a month. That might be enough to help a small brewery make payroll, for example.  It’s still a month away, though.
    • Plenty of people qualify for small business loans — even those who file taxes as sole proprietors.  That means Uber drivers and even freelance journalists.
    • In previous disasters, about 50% of loan applications were granted. So it’s not a sure thing, but it’s a pretty good bet
    • If you have any notions you might benefit from an SBA loan, don’t wait get in line. Grab your number at the deli counter now.  You can always turn the funding down later.

Listen to my 10-minute podcast conversation with Gerrie here

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About Bob Sullivan 1483 Articles
BOB SULLIVAN is a veteran journalist and the author of four books, including the 2008 New York Times Best-Seller, Gotcha Capitalism, and the 2010 New York Times Best Seller, Stop Getting Ripped Off! His latest, The Plateau Effect, was published in 2013, and as a paperback, called Getting Unstuck in 2014. He has won the Society of Professional Journalists prestigious Public Service award, a Peabody award, and The Consumer Federation of America Betty Furness award, and been given Consumer Action’s Consumer Excellence Award.

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