ANCHORAGE (KTUU) As Anchorage prepares to hunker down following Mayor Ethan Berkowitz’s emergency order, many non-essential businesses will be shutting their doors for at least 10 days.
That means 10 less days of revenue on top of what has already been a poor month due to the coronavirus outbreak. John Staser, owner of Mountain View Sports, compared the losses businesses have been seeing with Alaska’s recent recession.
“We did the 5 years-worth of recession overnight,” he said.
And while the revenues are stopping, many of the costs for local businesses aren’t.
“Rent, insurance, payroll, there’s a litany of these expenses that we need relief from,” he said.
And as the outbreak continues to grow, it’s likely things will get worse before they get better, but there was some good news for Alaskans businesses Saturday: the US Small Business Administration declared an economic disaster in Alaska, opening up applications for disaster relief loans.
“They can borrow up to two million dollars, fixed interest rate of 3.75%,” said the SBA Office of Disaster Relief Public Information Officer Susheel Kumar. “No fees, no points, no closing costs, no premium penalty, and your first payment is due 12 months from now.”
The loans can be paid off in plans up to 30 years long and are designed to help cover those costs Staser talked about.
“I think it's great that the SBA is trying to help small businesses,” he said. “And every small business is going to take whatever they can get from federal and local governments.”
But he’s also worried that just a loan won’t be enough to address the damage this outbreak is doing to small business. His concern is the weight of a loan eventually falls on the business that takes it out.
“Even though it’s a low-interest loan, you’re bearing the burden of these forced closures and the loss of the business,” he said.
In cases where loans are taken out to expand, he said they make sense, but taking out a loan to cover costs without revenues means betting that the future will be better to pay off the loan.
"I think, what small businesses really need is a way to eliminate expenses because our income has been eliminated," he said.
Staser suggested one way to protect businesses would be that banks require less payments form landlords on mortgages during the outbreak, so in turn the landlords could require less payments of their tenants, like small businesses.
Municipal, State, and Federal leaders have said previously they’re looking for ways to reduce the economic impacts of the COVID-19 outbreak, but for now, businesses that choose to can apply for a loan by December 21.
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