As fallout from the COVID-19 pandemic sends ripples through the economy, electric cooperatives and their consumer-members have
new resources from the U.S. Small Business Administration—a cash advance, low-interest loans and payroll protection.
SBA is making economic injury disaster loans available to an expanded group of small businesses, including co-ops, at a low interest rate with repayment deferred for 12 months. Applicants can request a $10,000 cash advance whether they qualify for the loan, cancel it or are denied.
In addition, the newly created Paycheck Protection Program (PPP) is designed to help small businesses and certain nonprofits keep staff employed, pay utility bills, and cover rent or mortgage payments during the coronavirus pandemic. NRECA is working to ensure that electric co-ops that may need additional assistance to support ongoing operations during the pandemic will be eligible for the PPP.
NRECA urged the administration to ensure that electric co-ops are fully eligible for these relief programs, which were part of the recently enacted
Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
“The average distribution cooperative employs just under 50 people and faces many of the same challenges that are afflicting other small businesses during the coronavirus pandemic,” NRECA CEO Jim Matheson wrote in an
April 1 letter to Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza.
“These challenges include difficulties in retaining employees, maintaining payroll, and covering certain day-to-day expenses. Despite these challenges, electric co-ops must continue to keep the lights on while many of their customers are unable to pay their electric bills.”
NRECA also joined 16 other cooperative organizations in asking the administration to ensure co-ops are eligible for SBA’s emergency programs.
“The harsh economic consequences of COVID-19 do not discriminate by business structure. There are more than 65,000 cooperative businesses in the United States facing the same economic hardships as other business models,” the co-op groups wrote to the SBA administrator.
“Collectively, cooperatives generate more than $75 billion in annual wages. It is imperative that cooperative businesses are treated equally with other business structures and able to access the PPP.”
See NRECA’s coronavirus resources for co-ops, including guidance on business continuity planning and communication as well as event schedule changes.