Gov. Charlie Baker is throwing small businesses a $10 million lifeline as their sales shrink dramatically amid concerns over the spread of COVID-19.
Baker and Lt. Gov. Karyn Polito announced the creation of the Small Business Recovery Loan Fund Monday afternoon. The fund will provide emergency funds up to $75,000 to any Massachusetts-based businesses impacted by COVID-19 with under 50 full- and part-time employees, including nonprofits. The loans are immediately available to eligible businesses with no payments due for the first six months, followed by 30 months of principal and interest payments and no prepayment penalties.
“As our administration continues to take steps to protect the health and safety of residents, we recognize the hardships facing the small businesses that create the foundation of the state’s economy,” Baker said in a statement. “This recovery loan fund is a new resource to help small businesses address emergency needs due to the disruption caused by the ongoing COVID-19 pandemic.”
The loans will be administered by the Massachusetts Growth Capital Corporation (MGCC), which also capitalized the fund. Businesses should apply at the MGCC website, EmpoweringSmallBusiness.org. MGCC is a quasi-public corporation of the commonwealth that finances and provides managerial assistance to small businesses, often minority and women-owned businesses, and promotes economic development throughout the state, focusing on Gateway Cities and low- to moderate-income communities.
“Small business owners and their employees are our neighbors and our friends, and their enterprises play vital roles in our communities, and we are committed to helping them cope with the impacts of COVID-19,” Polito said in a statement. “As we announce this small business recovery loan fund, we will continue to work with the legislature and our federal partners to find ways to effectively provide assistance during this public health emergency.”
The state fund comes as the state is working on a disaster declaration that will enable its small businesses access to special Small Business Administration loans of up to $2 million per business hurt by the coronavirus epidemic. Those loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the virus’ impact.
Many Boston-based restaurants have reported declines in sales of 50 percent of more in the past week, and many retail businesses are expected to be significantly hurt or even be forced to close following Baker’s statewide ban on gatherings of over 25 people. Public health officials urge residents to stay home as much as possible for the next several weeks to help contain the coronavirus’ spread amid a nationwide shortage of tests that could help identify those infected, whether or not they show symptoms.
