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Small Business Association's Disaster Loan Assistance program is currently offering up to $2 million in low-interest federal loans for each small business to help provide working capital in response to the coronavirus pandemic. Courtesy photo
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Local businesses urged to seek disaster assistance loans

CARLSBAD — As orders have come down from the governor’s office, many businesses are on edge due to the COVID-19 pandemic.

In response to growing economic fears, the Carlsbad Village Association and Carlsbad Chamber of Commerce are hitting local outreach efforts hard to help soften the financial blow, especially for small businesses. Both entities have shared information with local businesses and the general public regarding the U.S. Small Business Administration’s (SBA) Disaster Loan Assistance program for those negatively impacted by the coronavirus.

Christine Davis, executive director of the CVA, and Bret Schanzenbach, chief executive officer of the chamber, said they’re also providing emergency unemployment information from the state, most notably that California is waiving the one-week unpaid waiting period for unemployment insurance

Schanzenbach said he is urging any small business to apply for the SBA’s federal disaster assistance program, noting the process is fairly user-friendly. The funds can help businesses stay afloat through such a fluid situation, he said.

Additionally, Schanzenbach noted the federal government is currently working on emergency legislation, but since nothing has been signed, it is premature to celebrate any federal solutions.

The SBA program is currently offering up to $2 million in low-interest federal loans for each small business to help provide working capital, paying fixed debts, payroll, accounts payable and other bills not able to be paid due to the pandemic. The rate is 3.75% for small businesses without available credit elsewhere or eligible. Nonprofits are also eligible with interest rates at 2.75%.

The SBA loans are long term, up to 30 years, and terms are “determined on a case-by-case basis, based upon each borrower’s ability to repay.”

“All of this stuff is very fluid,” Schanzenbach said. “Those are low-interest rate, pretty good loans to help people with the affects.”

Davis said restaurants in the Village are cutting down on capacity and focusing on curb-side pickup, such as Park 101 and Bluewater Grills. However, the CVA has postponed all Farmer’s Markets, which run on Wednesdays, through April 15.

She said the Department of Environmental Health has requested farmers markets to close but added many are staying open because they are a reliable food source. She also questioned if supermarkets are deemed safe, or at least to remain open, perhaps open-air markets should be waived.

“There is that balance,” Davis said. “We respect the self-distancing and the health risks, but we would also like to help people by providing a resource.”

Overall, though, she said the small businesses are on edge as more closures from state and federal officials. Davis said for the time being, many of the Village and Barrio businesses are becoming more reliant online as a stop-gap measure.

“Because of the nature of this problem, it’s changing so fast and it’s fluid,” she added. “It makes it very hard to plan and forecast and do basic things like employment schedules. Our businesses are being so creative.”

As for employment, Barry White, public information officer for the California Employment Development Department (EDD) said all eligible people will be issued payments within a “few weeks” after filing a claim.

Furloughed employees do not have to show they are looking for another job, Davis said, noting those workers will eventually return to those jobs after the crisis has subsided.

As for independent contractors and freelancers, White said a self-employed individual will not be eligible for unemployment unless they have been contributing to disability insurance, paid family leave or unemployment insurance. However, filing a benefit claim may lead to an investigation of an employer for misclassification.

“There are some self-employed options that these workers can choose to contribute to in order provide coverage under these programs,” he added. “But if the worker has not done so, we do encourage these workers to apply for DI, PFL, or UI benefits depending on their specific situation. It’s possible that the worker or a previous employer may have contributed on that worker’s behalf over the last 12 to 18 months, or that the individual may have been misclassified as an independent contractor instead of an employee. Filing a benefit claim can lead to an investigation of employment classification and benefits could be paid if the EDD finds the worker to be an employee and otherwise eligible for benefits.”

White added a self-employed individual or an unemployed worker who doesn’t qualify for regular UI benefits could be considered eligible for unemployment benefits if the federal government declares an emergency and makes Disaster Unemployment Assistance benefits available. These benefits are paid for by the federal government if an individual doesn’t qualify for a regular UI claim. 

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