Coronavirus News: Small businesses can get COVID-19 relief loans as early as Friday

Small businesses seeking loans under the government’s $2 trillion coronavirus relief package could receive money as early as Friday.

That prediction came Tuesday from senior administration officials who spoke to reporters about the details of the loan program.

Companies will be able to submit their applications on Friday. Because the government uses an approval process that has been stripped from that used for traditional commercial loans, the money can be made available to borrowers the same day, officials said.

Officials spoke to reporters on condition of anonymity as details have not been officially made public.

Loans are available for small businesses ranging from sole proprietors and freelancers to businesses with up to 500 employees.

The money is intended to help businesses that have suffered massive revenue losses due to the outbreak, including restaurants across the country forced to close.

The loans are guaranteed by the Small Business Administration. They provide for deferred payments and offer the prospect of a pardon if the money is used to retain workers or rehire those who have been laid off.

Businesses can borrow up to $10 million at an annual rate of 0.5% based on their payroll costs as well as their expenses for rent, mortgage interest and utilities. They will be required to provide receipts for those expenses, officials said.

All banks, credit unions and Farm Credit System institutions that are federally insured will be able to make the loans, not just institutions that are currently SBA lenders. The government will consider accepting non-bank lenders like online businesses as program participants. Most borrowers are expected to apply for the loans online.

Loans, under what is called the Paycheck Protection Program, are one facet of the government’s aid package. The SBA has started lending money through its Economic Disaster Loan program and also offers bridge loans offering up to $25,000 in loan with a quick turnaround. Details of all coronavirus relief loans can be found on the SBA’s website.

In addition, the Federal Reserve is planning a direct lending program for small businesses. Details of this program have not been released.