Disaster Preparedness Finance

Florida small businesses hurt by COVID-19 can apply now for interest-free bridge loans

Florida Gov. Ron DeSantis activated the Florida Small Business Emergency Bridge Loan Program. What that means: Small businesses that experienced economic injury from COVID-19 can apply for short-term interest free loans up to $50,000.

The application period is open now and runs through May 8, 2020.

“As we mitigate against the spread of COVID-19, the health, safety and well-being of Floridians comes first,” said Gov. DeSantis, in the announcement. “I understand the harm mitigation strategies will have on small businesses throughout our state. By activating the Florida Small Business Emergency Bridge Loan, we are providing the opportunity for Florida’s small businesses to receive cash immediately to ensure they can lessen the impacts felt as a result of COVID-19.”

The short-term, interest-free loans are aimed at helping bridge the gap between the time the economic impact occurred and when a business secures other financial resources, including payment of insurance claims or longer-term Small Business Administration (SBA) loans. We know that small businesses in hospitality, retail, transportation and logistics have already taken hits in sales and more economic distress is likely across multiple industries.

The Florida Department of Economic Activity (DEO) will administer the Florida Small Business Emergency Bridge Loan Program in partnership with the Florida SBDC Network and Florida First Capital Finance Corporation. Up to $50 million has been allocated for the program.

Gov. DeSantis said the $50 million pot may be expanded, if necessary. “This is a way to kind of keep people afloat, and then when we get on the other side of this, hopefully can be able to get back to business as usual,” he said at a press conference.

To be sure, the stakes are high. About 25% of businesses don’t open again after a major disaster, according to Institute for Business and Home Safety data cited by the U.S. Small Business Administration.

Here are the details of  the Florida Small Business Emergency Bridge Loan program:

Who can apply: Small business owners with two to 100 employees located in Florida and directly affected by COVID-19 can apply for short-term loans up to $50,000. These loans are interest-free for  one year and are designed to bridge the gap until either federal SBA loans or commercially available loans are available. To be eligible, the for-profit business must have been established prior to March 9, 2020 and demonstrate economic impacts as a result of COVID-19.

Terms: The loans up to $50,000 will be for one year with no interest. If not repaid within a year, the loan will be considered in default. Borrowers who default on the loans will be subject to normal commercial collection processes.

Where to apply: For more information on the program, visit www.floridadisasterloan.org. For questions regarding the Emergency Bridge Loan Program, contact the Florida Small Business Development Center Network at 866-737-7232 or email. The phone line will be answered during regular business hours; all voice mails and emails will be responded to within 24 hours. Regional Small Business Development Centers throughout Florida, including Florida SBDC at FIU, are gearing up to help facilitate the process.

Deadline: May 8, depending on favailability of funds.

DEO is also surveying Florida businesses that have been impacted by the coronavirus at FloridaDisaster.biz.

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