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.

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.

  • schizoEnglish
    2·
    14 days ago

    Exactly, and if there’s a group of people that are more ‘wait no, not like that!’ than small business owners, I’ve yet to meet them.

    I mean if you’re 60 and your business is having issues and you’re planning on retiring in a few years you’d think the rational thing would be to sell the damn business now, and retire a little early.

    But small-business-brain goes ‘Well, if I take $500k in debt on, I’ll be able to make my business worth twice as much!’, which sounds great, until it doesn’t work out, and now it’s someone else’s fault that it happened.

    Did the guy in this story SAY he did that? No, but I mean, it’s almost certainly at least part of what happened.