NEW YORK (AP) — In 2020 and 2021, COVID-19 Economic Injury Disaster Loans were a lifeline for small businesses.
But now some small businesses are having trouble paying them off. And a Small Business Credit Survey report from the 12 Federal Reserve banks shows that small businesses that haven't paid off COVID-19 Economic Injury Disaster Loans are in worse shape than other small businesses.
Dwayne Thomas, owner of events lighting company Greenlight Creative in Portland, Oregon, got a roughly $500,000 EIDL loan in 2020, when all events shut down, crippling his businesses.
EIDL loans were designed to help small businesses stay afloat during the COVID-19 pandemic. Most of these loans have a 30-year term with a 3.5% interest rate. With lower interest rates than typical loans, the loans were provided for working capital and other normal operating expenses.
Thomas says his business would not have survived without the loan. But, at 64, his plan to sell his business in a few years and retire has been scuttled, since the 30-year loan has left his business saddled with debt, even though otherwise it's a healthy business that turns a profit.
“We’re as successful as we’ve ever been," Thomas said. “It’s just that we have this huge thing hanging over us at all times. It is not going away on its own.”
The SBA awarded about 4 million loans worth $380 billion through the program. More than $300 billion was outstanding as of late 2023. Unlike some other pandemic aid, these loans are not forgivable and must be repaid.
The survey by the Federal Reserve Banks found firms with outstanding EIDL loans had higher debt levels, were more likely to report challenges making payments on debt and were less likely to be profitable as of fall 2023, when the survey was conducted.
Firms with outstanding EIDL debt are also more likely to be denied when applying for additional credit. Half said they were denied for having too much debt.
Still, the survey stopped short of saying the disaster loans were a negative for companies. Some companies said they would have gone out of business altogether if it weren't from the loans. And it's impossible to measure whether the companies that haven't paid off these loans weren't in worse shape from the start.
Colby Janisch, a brewer at 902 Brewing Company in Jersey City, New Jersey, received a loan from the EIDL program. But unlike a loan for an asset that you can pay off, the loan just went to rent and other overhead costs. And Janisch said the outstanding debt stops them from taking on other loans for assets that could help the business.
“It's hindered us because we don’t want to take out any loans to invest in the company now because we have such outstanding (debt),” he said. “So it’s definitely like a weighing on us, of like what we do going forward.”
FILE - The Federal Reserve building in seen in Washington, May 22, 2020. (AP Photo/Patrick Semansky, File)
LOS ANGELES (AP) — The 76th annual Emmy Awards were handed out Sunday at the Peacock Theater in downtown Los Angeles.
“Shogun” set a single season record for most wins with 18. “Shogun” won best drama series, and Hiroyuki Sanada and Anna Sawai won acting awards for their roles.
“Hacks'' won the award for best comedy series. ”Baby Reindeer" and "The Bear'' won four awards apiece.
Early winners included Ebon Moss-Bachrach, Jeremy Allen White and Liza Colón-Zayas, who won awards for their work in the comedy series “The Bear.”
Stars presenting Emmys to their peers included: Billy Crystal, Viola Davis, Selena Gomez, Steve Martin, Maya Rudolph and Martin Sheen.
Several actors and shows, including Rudolph, won last week. Rudolph won her sixth Emmy Award at last weekend’s Creative Arts Emmys for her voice work on “Big Mouth.” Jamie Lee Curtis also picked up a supporting actress Emmy last weekend for her appearance on “The Bear.”
Here’s a list of winners at Sunday's Emmys:
“Shogun”
“Hacks”
“Baby Reindeer”
Hiroyuki Sanada, “Shogun”
Anna Sawai, “Shogun”
Billy Crudup, “The Morning Show”
Elizabeth Debicki, “The Crown”
Jeremy Allen White, “The Bear”
Jean Smart, “Hacks”
Liza Colón-Zayas, “The Bear”
Ebon Moss-Bachrach, “The Bear”
Richard Gadd, “Baby Reindeer”
Jodie Foster, “True Detective: Night Country”
Jessica Gunning, “Baby Reindeer”
Lamorne Morris, “Fargo”
“The Traitors,” Peacock
“Last Week Tonight with John Oliver,” HBO/Max
“The Daily Show,” Comedy Central
Alex Edelman, “Just for Us”
Lucia Aniello, Paul W. Downs and Jen Statsky, “Hacks”
Will Smith, “Slow Horses”
Richard Gadd, “Baby Reindeer”
Steven Zaillian, “Ripley”
Christopher Storer, “The Bear”
Frederick E.O. Toye, “Shogun”
Greg Berlanti
For more on this year’s Emmy Awards, visit: https://apnews.com/hub/emmy-awards
Jean Smart accepts the award for outstanding lead actress in a comedy series for "Hacks" during the 76th Primetime Emmy Awards on Sunday, Sept. 15, 2024, at the Peacock Theater in Los Angeles. (AP Photo/Chris Pizzello)
Richard Gadd accepts the award for outstanding lead actor in a limited or anthology series or movie for "Baby Reindeer" during the 76th Primetime Emmy Awards on Sunday, Sept. 15, 2024, at the Peacock Theater in Los Angeles. (AP Photo/Chris Pizzello)
Liza Colon-Zayas poses in the press room with the award for outstanding supporting actress in a comedy series for "The Bear during the 76th Primetime Emmy Awards on Sunday, Sept. 15, 2024, at the Peacock Theater in Los Angeles. (AP Photo/Jae C. Hong)
Liza Colon-Zayas poses in the press room with the award for outstanding supporting actress in a comedy series for "The Bear during the 76th Primetime Emmy Awards on Sunday, Sept. 15, 2024, at the Peacock Theater in Los Angeles. (AP Photo/Jae C. Hong)
Emmy Awards: A partial list of top winners
FILE - A view of the stage at the 71st Primetime Emmy Awards in Los Angeles, Sept. 22, 2019. (Photo by Chris Pizzello/Invision/AP, File)
Emmy Awards: A partial list of top winners
