NC House plans to add $25 million for small-business loans
Posted April 14, 2020 9:04 a.m. EDT
Updated April 14, 2020 12:32 p.m. EDT
Raleigh, N.C. — The state would add $25 million to a bridge loan program for small businesses under legislation planned once the General Assembly goes back into session April 28.
The money would be added to a program already underway through Golden LEAF to give out $15 million in bridge loans. It's in addition to the federal Paycheck Protection Program that launched on April 3.
Business owners have reported problems accessing the federal money, but Congress is already considering a funding boost on the expectation that the $350 billion national program will be depleted.
Other state relief is likely as the legislature comes into session, but House Speaker Tim Moore said Tuesday that lawmakers want to start on the smaller end and see the totality of federal availability.
"We didn't want to put a big number on it and need to back up," Moore, R-Cleveland, said during a video conference meeting of a House COVID-19 working group.
Golden LEAF's initial $15 million "went fast," Moore said.
The Rocky Mount-based economic development foundation is funded through national tobacco settlement money.
The new money would be available to businesses with 50 or fewer employees, with no payments for the first six months and an interest cap of 4 percent. After that, repayment begins at a minimum of 5.5 percent interest, according to a legislative summary of the bill.
Loans would top out at $50,000. Details could change as the bill works its way through the General Assembly.
Administrative costs would be capped at 5 percent, with Golden LEAF retaining some of that and lending institutions – nonprofits and community banks that service the loans – keeping interest payments.
Repayment would be capped at 54 months, with the principal flowing back into the state's general fund.
Also Tuesday, the House's working group on economic support backed legislative language to waive interest payments on taxes filed by July 15, which is the new filing deadline for state and federal income taxes. This has been discussed for some time, and state leaders have promised to waive the interest charges, but it takes a formal vote to do it. That will come soon after the April 28 start to a legislative session focused on COVID-19.
The draft language approved by the working group Tuesday would waive interest on individual and corporate income taxes, as well as franchise tax returns. The bill "applies to partnership and estate and trust tax returns, as well as estimated tax payments for 2020 that were due before April 15," according to a legislative summary.
The bill also confirms flexibility Gov. Roy Cooper's administration has added to the state's unemployment filing system, including allowing more employers to file "attached claims," which are claims employers file on behalf of their employees.