Physician practices and other healthcare businesses under the gun to correct Y2K computer problems may be eligible for federally guaranteed loans from the U.S. Small Business Administration.
The new program offers loans of up to $750,000 to businesses to repair or acquire information technology and to hire consultants or other outside experts.
After Jan. 1, the program also can be tapped to provide relief from substantial economic injury as a direct result of Y2K-related computer problems or as an indirect result of economic injury because of the Y2K problems of a service provider or supplier.
Applicants must be for-profit businesses with maximum annual service revenues of about $3.5 million, said Alfred Belluomini, assistant finance director for the SBA's Illinois district in Chicago.
The agency can provide up to a 90% guarantee on loans under $100,000 and 85% on loans of more than $100,000. Interested businesses apply through local lenders, which close the deal, disburse the money and service the loan.
The Y2K loan program provides maximum flexibility on terms and conditions that enhance a borrower's ability to repay the debt, Belluomini said. For example, it allows up to a one-year moratorium on principal payments. It also offers the benefit of the doubt to an applicant whose ability to repay a loan is deemed borderline.
Information about the program is available on the agency's World Wide Web site at www.sba.gov. To locate the nearest SBA office, call 1-800-U-ASK-SBA.