Small Business Association Offering Disaster Loans Due to COVID-19March 17, 2020
The U.S. small business administration (SBA) is offering low interest federal disaster loans to impacted businesses. We share the details here.
Due to the recent outbreak of the coronavirus (COVID-19), the U.S. Small Business Administration (SBA) is offering low-interest federal disaster loans for working capital to impacted small businesses. Let’s dive in.
SBA’s response to the coronavirus
As provided by the Coronavirus Preparedness and Response Supplemental Appropriations Act that was recently signed by the President, the SBA declared a federal disaster.
This disaster declaration makes SBA assistance available to the state of Connecticut, the counties of Berkshire, Hampden and Worcester in Massachusetts, Dutchess, Putnam and Westchester in New York and Kent, Providence and Washington in Rhode Island. More areas will likely be added as the virus’s impact continues to spread.
What is a disaster loan?
These low interest loans are provided to affected businesses of all sizes, private nonprofit organizations, homeowners and renters.
What is an economic injury?
In the case of the coronavirus outbreak, there hasn’t been physical damage but rather economic damage. Small businesses, private non-profit organizations of any size, small agricultural cooperatives and small aquaculture enterprises whose finances have been adversely impacted as a result of the coronavirus may qualify for Economic Injury Disaster Loans.
For a quick-fact sheet:
How much do the loans cover?
Eligibility for economic injury disaster loans is based on the financial impact of the virus. In a lot of cases, impacted small businesses can borrow up to $2 million for economic damage, used to pay fixed term debts, wages, vendor payables, and other bills that cannot be paid because of the disaster’s impact.
The interest rate is 3.75% for small businesses, 2.75% for private nonprofit organizations. SBA offers loans with long-term repayment options in order to keep payments affordable, up to a maximum of 30 years. These are available to entities without the financial ability to offset the adverse impact without hardship.
How do you apply for a SBA?
You can visit https://disasterloan.sba.gov/eta to receive additional disaster assistance information and download applications. You can also call SBA’s customer service center at 800-659-2955 or email firstname.lastname@example.org.
The deadline to apply for an economic injury disaster loan is December 16, 2020. A loan officer will determine your eligibility during processing, and after reviewing any insurance or other recoveries. The loan officer will also assist you in getting all the necessary information to complete the loan application.
Visit our Coronavirus Resources Center for more information on the outbreak and how you can prepare for the adverse economic impact.