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Relief options available for Johnson City businesses struggling under COVID-19

David Floyd • Apr 6, 2020 at 7:38 PM

Dick Nelson, owner of both Nelson Fine Art and Dos Gatos Coffee Bar in downtown Johnson City, is like many business owners trying to adjust to the new normal under the novel coronavirus (COVID-19).

Both of his businesses are closed, and the nine employees Nelson has at Dos Gatos have been laid off, allowing them to file for unemployment. At Nelson Fine Art, which performs custom framing, Nelson said business has been reduced to about 10% of normal while Dos Gatos Coffee Bar, which is still selling coffee beans, has seen its business drop to about 5%.

“We’re waiting this out,” he said.

Nelson, like a host of other small business owners across the nation, has sought financial assistance from the U.S. Small Business Administration as a way to stay afloat in the uncertain economic atmosphere created by COVID-19, which has prompted many businesses to close or reduce services as a precaution against the spread of the illness.

Shawn McKeehan, deputy director at the SBA Tennessee District Office, highlighted Monday three aid options available through the Small Business Administration: an advance through the Economic Injury Disaster Loans program, loans offered through the Paycheck Protection Program and small business bridge loans.

Businesses with less than 500 employees can apply — using a faster, abbreviated application — for a $10,000 advance to an Economic Injury Disaster Loan that won’t have to be repaid.

“That’s the fastest route right now to get anything under these COVID-19 relief options,” McKeehan said.

Additionally, McKeehan said that under the Paycheck Protection Program, an initiative created under the $2.2 trillion coronavirus aid bill Congress approved late last month, businesses can seek loans totaling up to $10 million.

According to the Small Business Administration website, the loan will be completely forgiven if the business uses the money for payroll costs, interests on mortgages, rent or utilities. At least 75% of the amount forgiven must be used on payroll.

The organization notes on its website that loan forgiveness is based on the employer keeping or quickly rehiring employees and maintaining salary levels.

Businesses with less than 500 employees are eligible to apply for the program. Lenders started processing applications on April 3, and funding is available through the program through June 30.

McKeehan said the money is dispersed through SBA-approved lenders. The organization has a list of those available on its website at www.sba.gov/paycheckprotection/find and is continuing to add approved lenders to that program.

If a business owner does receive a $10,000 Economic Injury Disaster Loan advance, that allotment will be taken out of the money they’ve been approved for under the Paycheck Protection Program.

Finally, businesses can apply for an up to $25,000 bridge loan through “SBA express lenders,” a quick relief option that can act as a stop-gap measure until they get their Economic Injury Disaster Relief loan approved.

Nelson said he has been able to submit an application for an Economic Injury Disaster Loan, but noting that he banks with a credit union that is not an SBA lender, Nelson is uncertain whether he will be able to access funding under the Paycheck Protection Program.

All of the banks he’s contacted require customers to have a business account with them to access funding from them through that program.

McKeehan said the Small Business Administration has been hearing complaints that lenders are not making loans available to people who do not have a prior business relationship — such as a bank account, credit card or prior loan — with the institution.

Relief for rural hospitals, local governments

In a press release, Gov. Bill Lee’s office announced Tennessee will allocate $10 million in grants to small and rural hospitals that are facing financial troubles because of COVID-19.

“Small and rural hospitals are critical to fighting COVID-19 and these grants will help complement federal aid dollars to ensure hospitals can continue delivering care through this crisis,” Lee said in the release. “These organizations not only provide care for existing needs but are also a key part of our efforts to build and maintain bed capacity during the expected surge of COVID-19 cases.”

Funds will be capped at $500,000 per hospital.

Lee also announced $200 million in grants that would be distributed to every city and county government in Tennessee for one-time expenses.

Funding will be based on population figures from the U.S. Census Bureau. Each county will receive at least $500,000, and each city or municipality will receive at least $30,000.

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