Only one Alaska business has been approved for an Economic Injury Disaster Loan related to COVID-19, and the loan is a big one: $500,000 – more than double the national average.
That’s according to the first report the Small Business Administration has issued on the loan program, based on figures current as of Sunday.
The Small Business Administration is not naming the fortunate Alaska borrower. A public information officer said the name is subject to the federal Privacy Act.
The agency is still processing loan applications that arrived before the money ran out last week, so the number will grow.
Economic Injury Disaster Loans for COVID-19 were part of the $2.2 trillion Cares Act, though Congress put far less money into it than it did the separate Paycheck Protection Program, which provides government-backed bank loans that can be forgiven if they’re spent on payroll and other allowable expenses.
But for truly small businesses, the Economic Injury Disaster Loan program has a huge selling point: the government is giving applicants up to $10,000. It’s called a “loan advance” but it never has to be paid back, and an applicant can keep the advance even if the loan isn’t approved.
More than 1,600 Alaskans got “loan advances” from from the program, without getting the loans themselves, or at least they haven’t yet. The average amount advanced was just $4,600, less than half of the maximum, for an Alaska total of $7.4 million
No other state had just one approved loan, according to an agency report dated Monday.
Congress and the Trump administration have reached a deal to put more money into programs to help small businesses. A bill the Senate passed Tuesday funds the Economic Injury Disaster Loan program at $60 billion – six times what was in the prior coronavirus relief bill.
Nationally, the Paycheck Protection Program has faced criticism because some banks seemed to prioritize large business and major national chains.
For the Economic Injury Disaster Loan, applicants apply on the Small Business Administration’s website directly, with no bank involved.
