The vast majority of Guam businesses are adversely impacted by the Covid-19 pandemic, according to a recent membership poll by the Guam Chamber of Chamber.
The Guam Chamber said its survey sought to evaluate how the pandemic has impacted doing business on Guam, what procedures businesses were taking to remain open and what kind of assistance was needed for companies to stay in business.
The survey revealed that of the austerity measures implemented, almost all the respondents have had to reduce employee hours, implement furloughs or layoffs. Other measures implemented by businesses include:
Reduction in community contributions;
Immediate freeze on expenditures;
Reduction of inventory;
Elimination of employee benefits;
Temporary closure of business; and,
Implementation of social distancing and remote work protocols.
Businesses were asked what measures would benefit their companies in this period of uncertainty and an overwhelming majority (60 percent of respondents) responded that a temporary reduction in the business privilege tax would be most beneficial to their businesses. 19 percent indicated that increasing the benefits of the Dave J Santos Small Business Act would be helpful and 7 percent would be interested in a small business loan. If the business privilege tax was reduced, 65 percent of respondents would use savings to maintain and retain employees. 22 percent would reinvest in business improvements. Others would pass the savings on to consumers and pay business obligations.
When respondents were asked to indicate if the Government of Guam was doing enough to help the business and its employees during this time of economic uncertainty, 77 percent responded that the government wasn’t doing enough while 16 percent responded that they were not sure, 5 percent responded affirmatively while 2 percent chose not to respond.
“The results of this survey confirm that our economy has been devastated by this global pandemic. The coronavirus crisis has significantly impacted doing businesses on Guam and will have severe repercussions on our people’s ability to sustain themselves and their families,” said Christine Baleto, chairwoman of the board.
When asked to provide additional recommendations to the government in terms of relief for businesses, the most offered suggestion was any form of tax relief in the form of credit or exemption. Additional suggestions included lower cost of utilities, establishing a relief program to assist employers and employees, cut government spending.
Catherine Castro, Chamber president, acknowledged that "the Guam Chamber was made aware that the Governor has recently sent a letter to US SBA requesting for disaster relief. Once approved, the SBA Economic Injury Disaster Loan Program would be activated and become available to all businesses affected by COVID-19.” She further reported that “Congressman Michael San Nicolas has been working with the Guam Chamber of Commerce to keep the business community abreast of any economic stimulus developments as they occur in Washington DC.”
“The Guam Chamber has been diligent in working for the good of the business community to keep our people employed during this trying time,” added Chairwoman Baleto. “It is our main objective to sustain and grow our economy. We will continue our dialogue with our local and federal government officials in pursuing economic relief to our working families and our local businesses.”
The poll went live on Friday afternoon, March 13 and closed at 5:30 pm on Friday, March 20.
Jovita Carranza, administrator of Small Business Administration, announced on March 21 that the SBA is offering low-interest loans to Guam businesses that are suffering economic injury due to the pandemic.
“SBA is strongly committed to providing the most effective and customer-focused response possible to assist Guam small businesses with federal disaster loans. We will be swift in our efforts to help these small businesses recover from the financial impacts of the coronavirus,” Carranza said. She said the small businesses, private non-profit organizations of any size, small agricultural cooperatives and small aquaculture enterprises that have been financially impacted as a direct result of the coronavirus pandemic since Jan. 31. may qualify for for Economic Injury Disaster Loans of up to $2 million to help meet financial obligations and operating expenses which could have been met had the disaster not occurred.
“These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. Disaster loans can provide vital economic assistance to small businesses to help overcome the temporary loss of revenue they are experiencing,” Carranza added. Eligibility for Economic Injury Disaster Loans is based on the financial impact of the Covid-19. The interest rate is 3.75 percent for small businesses. The interest rate for private non-profit organizations is 2.75 percent. SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years and are available to entities without the financial ability to offset the adverse impact without hardship.
Under the SBA’s Economic Injury Disaster Loans program, local businesses can avail loans to pay fixed-debts, payroll and other bills during these trying times at a low interest rate for a period not to exceed 30 years.
“Given that our local entrepreneurs are the driving force of our economy, I am grateful for the assistance from our Federal Partners to ensure that our business infrastructure can remain intact," said Speaker Tina Muna Barnes. “I will continue to work with our Federal Partners, our Governor, and especially our Congressman to ensure that we leave no stone unturned.”
The deadline to apply for an Economic Injury Disaster Loan is Dec. 21, 2020.
Applicants may apply online, receive additional disaster assistance information and download applications at https://disasterloan.sba.gov/ela. Applicants may also call SBA’s Customer Service Center at (800) 659-2955 or email disastercustomerservice@sba.gov for more information on SBA disaster assistance.