COVID 19: Government Relief Programs for Life Science Companies
March 19, 2020
By John Pennett
Owing to the COVID-19 crisis, companies are finding themselves under duress. Issues range from supply chain disruption, altered work arrangements and patterns, reduction of non-essential medical procedures, expected tightened public and private capital sourcing, and more.
In response, the U.S. federal and some state governments are beginning to consider or offer relief in the form of tax payment holidays, expedited regulatory processes, and some direct aid in the form of loans. The federal government is also exploring a plan to give Americans billions in direct payments, similar to 2008. There is also discussion of potentially invoking the Defense Production Act, which will allow the administration to direct factories to produce more face masks, gowns, gloves and other critical medical supplies.
As an example, the Small Business Administration has a disaster recovery plan. Once a disaster declaration is formally established, small businesses could apply for a loan of up to $2 million at a 3.75% interest rate and nonprofit organizations at 2.75% for a timeframe of up to 30 years (all individually negotiated). For more specific details on the loan programs, contact your local SBA office.