U.S. Small Business Administration (SBA) Offering Disaster Assistance In Response To COVID-19
Under the recently enacted Coronavirus Preparedness and Response Supplemental Appropriations Act (the Act), small businesses that have suffered substantial economic injury as a result of COVID-19 can apply for low-interest federal disaster loans through SBA. Small businesses and nonprofits can apply for working capital loans of up to $2 million.
We’ve highlighted the following key details of the Act for you here, but you can also learn more by visiting the COVID-19 disaster assistance page on SBA’s website.
- State governors must first request access to the Economic Injury Disaster Loan program. Once the declaration is made, information on the application process for disaster loan assistance will be made available to affected small businesses within the given state.
- Loans carry an interest rate of 3.75% for small businesses and 2.75% for nonprofits.
- Loans can be used to cover accounts payable, debts, payroll and other bills.
- Loans can be offered 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.
- Businesses will apply for loans online and select “Economic Injury” as the reason for seeking assistance.
- SBA offers disaster assistance via its customer service center. If you have questions or want to check if your state is eligible, contact U.S. Small Business Administration via phone at 800.659. 2955 (TTY: 800.877.8339) or e-mail [email protected].
Please see this additional information regarding expansion of the EIDL program and addition of the Emergency Economic Injury Grants:
- In addition to obtaining an EIDL as explained above, the CARES Act has authorized an additional grant for applications to the EIDL. These grants provide an emergency advance of up to $10,000 to small businesses and private non-profits harmed by COVID-19 within three days of applying for an SBA Economic Injury Disaster Loan (EIDL). To access the advance, you first apply for an EIDL and then request the advance. The advance does not need to be repaid under any circumstance, and may be used to keep employees on payroll, to pay for sick leave, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent and mortgage payments.
- Who is eligible for the EEI Grant? Those eligible for an EIDL and who have been in operation since January 31, 2020, when the public health crisis was announced.
Businesses that are seeking short-term support in either the loan or grant format are encouraged to apply at the special COVID-19 application page here: https://covid19relief.sba.gov/#/
The Coronavirus situation is changing rapidly, as are the updates to various relief efforts. We will continue to monitor news and keep you updated as clarification is provided.
If you have questions, be sure to reach out to us. Our entire team is here to support and guide you!
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