COVID-19 government disaster loans saved businesses, but saddled survivors with debt

AP Business Writer

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 their COVID disaster loans are in worse shape than other small businesses. Most of the disaster 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.