No clear role for Legacy Funds, though other assistance programs available

Mar. 27--A variety of economic assistance programs are available to businesses and individuals impacted by the coronavirus, though much of that assistance depends on the Coronavirus Aid Relief and Economic Security Act, which has yet to pass the U.S. House of Representatives.

A further unknown for North Dakotans is the use of Legacy Funds to provide support during the coronavirus pandemic. The Legacy Fund was brought up only once at a teleconference hosted by the Greater North Dakota Chamber on Thursday, March 26, which was joined by several top state officials.

Eric Hardmeyer, president of the Bank of North Dakota, said he has heard a number of questions from state legislators and others about using Legacy Funds for loans to small businesses. Hardmeyer, however, did not answer that question and said the Bank of North Dakota has the necessary capital, hundreds of millions of dollars, to provide the loans.

"We're here for you. We understand that this is our mission; this is what we were created for," Hardmeyer said.

Finding the resources

-- As for other assistance programs, Al Haut district director for the U.S. Small Business Administration made clear that disaster loans taken out though the SBA are, in fact, loans and needed to be repaid. The loans are for businesses that employ fewer than 500 people and can provide up to $2 million for operating costs and payroll needs. Interest rates for disaster loans are capped at 3.75% and can be paid back over 30 years. These loans are also available at a lower rate for nonprofit entities. Disaster loans may be applied for at sba.gov.

-- The C.A.R.E.S. Act, which Haut noted has not been signed into law yet, is an enormous, $2 trillion stimulus package designed to give loans to small and large businesses alike. The loans must be applied for through a local lender that participates with the SBA. Haut said most of the banks and some of the credit unions in the state are SBA participants.

Businesses applying for these loans must have been considered viable as of Feb. 15, so as not to give loans to an already failed business. The interest rate will be determined by the lender, though there are limits. The loans can be for up to $10 million for business expenses, including payroll. They are guaranteed by the SBA.

"The local lender should have no risk that they will lose money associated with these loans," Haut said.

-- Workers in quarantine who are able to work but can't do so from the quarantine site are able to receive unemployment benefits, according to Bryan Klipfel, executive director of North Dakota's workforce safety and insurance.

Klipfel also said there is a lot of money for unemployment claims. The federal government would provide additional benefits per month for jobless workers, of up to $600 per week, on top of state benefits. This, of course, depends on the C.A.R.E.S. Act being passed. The benefits would extend to those who are partially unemployed, because of coronavirus.

-- Jon Godfread, commissioner of the Insurance Department joined the call to say business interruption policies include exclusions for communicable diseases, such as COVID-19. With so many businesses impacted by the virus, claims for losses would not be able to be covered.

As far as personal insurance goes, Godfread said he has asked auto insurers in the state to extend coverage to people who suddenly find themselves making deliveries. Normally, people who use their cars for work must be insured for commercial purposes. Changes in business models means more delivery drivers. Godfread asked drivers to contact their insurance companies to extend their insurance to cover them while they drive for work.

More information, including the audio of the call, is available at https://ndresponse.gov/.

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