SBA director to small biz: If you think you’re going to need a disaster loan, start the application now
Mar 23, 2020, 1:25pm EDT Updated: Mar 23, 2020, 2:51pm EDT
“If you think you’re going to need it, I would apply. You should apply for more than you think you’re going to need,” said the head of the SBA office that covers Albany.
Bernard Paprocki, director of the U.S. Small Business Administration office that covers Albany, said the volume of calls they are getting is unprecedented as businesses shut down due to the coronavirus.
Those calls picked up even more on Thursday afternoon when the SBA opened up applications offering low-interest federal disaster loans to New York small businesses.
“If you think you’re going to need it, I would apply. You should apply for more than you think you’re going to need,” Paprocki said. “You can get approved up to $2 million. In my mind all I think I may need is $50,000, but apply for $200,000 and if you need more than $50,000, you’ve got it.”
Paprocki is the director of the Syracuse district office, which covers 34 counties from Kingston to the Canadian border, including the Albany region.
Paprocki said he has worked at the SBA for 33 years and the volume of calls and interest they are receiving is unprecedented. And those calls are only expected to increase as Gov. Andrew Cuomo has ordered all non-essential businesses in the state to shut down their on-site operations.
“There are 33 million small businesses in the country and every single one of them is affected,” Paprocki said.
He said the SBA’s previous high was after 9/11 when travel agencies came to a screeching halt. During that time, Paprocki said the SBA did 11,000 loans nationwide.
“Here, we could exceed that in a week or less,” he said.
New York state businesses could start applying last week for the Economic Injury Disaster Loan program. Under that program, companies can apply for low-interest loans of up to $2 million to help pay for fixed debts, payroll, accounts payable and other bills.
Interest is 3.75% for small businesses and 2.75% for nonprofits.
Under normal circumstances, the application process takes five days. Paprocki said he expects applications will be approved or denied in eight to 21 days.
His best advice for small businesses is to make sure the applications are precise and accurate.
“You don’t want to skip over some things, you’ll go back to the end of the queue,” Paprocki said. “Start early, get it in, do a complete application, and call the customer service number.”
Paprocki said the SBA is looking to bringing in the private sector to handle more volume. They still don’t know how bad this is going to be, and the way the SBA is set up is to handle disasters on a county-by-county basis.
“If you think you’re going to need it, go ahead and start the application process,” he said.
Albany Business Review