Local small businesses that were dealt a heavy blow by the COVID-19 pandemic are poised to get a helping hand from new legislation advanced on Thursday.
Bill 33-0410, which received unanimous support from the Senate Finance Committee, provides for the disbursement of monies to the V.I. Economic Development Authority to establish the Small Business Relief Grant Program and the COVID-19 Disaster Loan Program.
Both programs, which will be funded by the Coronavirus Aid, Relief, and Economic Security or CARES Act, serve to be a balm to those small businesses struggling with mandated closures, loss of employment, reduced personal income levels, food and supply shortages and government financial liquidity challenges.
EDA Executive Director Wayne Biggs Jr. called the measure “timely.”
“Although many businesses in the territory were able to benefit from the federal assistance administered by the U.S. Small Business Administration through its Paycheck Protection Program and the Economic Injury Disaster Loan, many small mom and pop businesses were not able to access these programs for various reasons and remain in need of financial assistance to remain viable,” he said.
“The grant and low interest loan programs created by this proposed legislation will have a positive effect on the small business community and the economy of the U.S. Virgin Islands as a whole,” he added.
According to the bill, the Small Business Relief Grant Program will be established by a $7 million disbursement from the Finance Department to the EDA.
The EDA, in turn, must only award businesses that have experienced financial hardships due to the COVID-19 pandemic. Awards will not exceed $10,000 per business.
The COVID-19 Disaster Loan Program, which will be created by a $4.5 million disbursement to the EDA, aims to provide low-interest loans to small businesses impacted by the pandemic. The EDA will not be able to issue a loan in excess of $50,000. The interest rate on a loan may not exceed 1%.
Moreover, the principal of the loan may be forgiven if the borrower has:
• Granted its employees paid leave.
• Maintained payroll expenses.
• Experienced increased costs of materials or increased inventory costs.
• Mortgage, lease or rent payments that can’t be met due to revenue loss.
Sen. Janelle Sarauw, one of the primary sponsors of the bill, said the EDA must submit a status report of both programs to the Legislature by Nov. 15 and that the funds must be awarded by Dec. 31.
“People are hurting,” she said. “Small businesses are closing and doors are closing every single day and we want to give assistance to these small businesses. So, this legislation is the right direction.”
Other primary sponsors were Senators Kurt Vialet and Donna Frett-Gregory.
The bill advanced to the Rules and Judiciary Committee. Voting in favor were Sarauw, Vialet and Frett-Gregory, along with Sens. Oakland Benta, Marvin Blyden, Allison DeGazon and Dwayne Degraff.