The U.S. Small Business Administration (SBA) is providing loans up to $2 million for businesses hit hard economically by the coronavirus.
The SBA Economic Injury Disaster Loans support small businesses to help overcome the temporary loss of revenue they are experiencing as well as working capital. The loans can be used to pay debts, including payroll, accounts payable, and other bills that can’t be paid because of the outbreak’s impact.
The SBA is offering designated states and territories the low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury due to the coronavirus. Businesses affected must have 500 or fewer employees and be in a designated disaster area to be eligible, Newsday reported.
SBA Administrator Jovita Carranza said the following Thursday in response to President Donald Trump’s address to the nation:
“The President took bold, decisive action to make our 30 million small businesses more resilient to coronavirus-related economic disruptions. Small businesses are vital economic engines in every community and state, and they have helped make our economy the strongest in the world.
Our agency will work directly with state governors to provide targeted, low-interest disaster recovery loans to small businesses that have been severely impacted by the situation. Additionally, the SBA continues to assist small businesses with counseling and navigating their own preparedness plans through our network of 68 district offices and numerous resource partners located around the country. The SBA will continue to provide every small business with the most effective and customer-focused response possible during these times of uncertainty.”
The SBA issued this news release:
“The SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years,” it said in a press release. “Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay…The interest rate is 3.75 percent for small businesses that can’t secure credit elsewhere. Businesses with credit availability are not eligible. The interest rate for non-profits is 2.75 percent.”
Process for Accessing SBA’s Coronavirus (COVID-19) Disaster Relief Lending
- The U.S. Small Business Administration is offering designated states and territories low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the coronavirus (COVID-19). Upon a request received from a state’s or territory’s Governor, SBA will issue under its own authority, as provided by the coronavirus Preparedness and Response Supplemental Appropriations Act that was recently signed by the President, an Economic Injury Disaster Loan declaration.
- Any such Economic Injury Disaster Loan assistance declaration issued by the SBA makes loans available to small businesses and private, non-profit organizations in designated areas of a state or territory to help alleviate economic injury caused by the coronavirus (COVID-19).
- SBA’s Office of Disaster Assistance will coordinate with the state’s or territory’s Governor to submit the request for Economic Injury Disaster Loan assistance.
- Once a declaration is made for designated areas within a state, the information on the application process for Economic Injury Disaster Loan assistance will be made available to all affected communities.
- 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. The interest rate is 3.75% for small businesses without credit available elsewhere; businesses with credit available elsewhere are not eligible. The interest rate for non-profits is 2.75%.
- SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.
- SBA’s Economic Injury Disaster Loans are just one piece of the expanded focus of the federal government’s coordinated response, and the SBA is strongly committed to providing the most effective and customer-focused response possible.
Contact the SBA disaster assistance customer service center at 1-800-659-2955 (TTY: 1-800-877-8339) or e-mail, firstname.lastname@example.org.