As a law firm catering to small businesses, we are in constant communication with the Small Business Administration, the US Department of Labor, New Jersey Department of Labor, New Jersey Economic Development Authority, New York Department of Labor, and many other state and federal agencies. In addition, we work with clients on a daily basis in assisting them with applying for and ultimately getting loans and grants from the appropriate agencies.
Our law firm is committed to helping small business owners comply with the current regulations and laws that are constantly changing due to Covid-19. We can also assist small businesses dealing with landlord-tenancy disputes, employment issues, and the many unique circumstances that are arising in this ever-changing world we are living in.
Our law firm is also available to assist small businesses in working with local banks that are SBA approved lenders, to get money into their bank accounts as quickly as possible.
Finally, we are here to help you so that as a small business owner, you can rest at ease knowing that our law firm is here to protect your business.
During Covid, the Government's largest mechanism for assisting small business owners was to give them Economic Injury Disaster Loans. The loans ranged from as small is $10,000-$5 million. No payments were due on the loans for at least a year. They had a 30 year loan term at a fixed interest rate of 3 3/4%. The government gave out the loans to businesses like candy. Every time the loans became due and owing, the Government extended the time period of the loan for payment, but left out the fact that the loans were accruing interest resulting in a balloon payment at the end of the loan. The last extension for 6 months ran out in October. The Government to date has not sent any business notices that the loan payments are due starting this month. They only sent a link for a website to get more information about your loan.
The government has traditionally given these loans with never any concern as to repayment, because if enough people complained about it, they forgave the loans. For example, President Donald Trump forgave all Economic Injury Disaster Loans that existed prior to Covid, because of complaints from victims who received these loans for Hurricane Sandy. Therefore, most businesses took out these loans out to survive Covid. The majority of these loans, with massive amounts of accrued interest, are becoming due this month and almost none of the businesses are prepared or have the money to pay them. Both the news and the government have forgotten about this issue. At the end of the day, the largest creditor of American small business will be the US Government and the majority of these loans will be defaulted on. If nothing is done about it soon, the rate of business failure will be astronomical nationally.
The government is responsible for this issue, and should be addressing it immediately.