Amidst the recent outbreak of the Coronavirus (COVID-19), the U.S. Small Business Administration recently declared they would provide financial disaster assistance in response to the 2020 pandemic. This administration understands the importance of economic support during times of crisis and is offering designated states and territories low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury.
Upon 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 signed by the President, an Economic Injury Disaster Loan declaration. This makes loans available to small businesses and private, non-profit organizations.
Here are a few key points to consider with this effort:
- SBA’s Economic Injury Disaster Loans offer up to $2 million in assistance per small business and can provide vital economic support to those businesses to help overcome temporary loss of revenue experienced.
- 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 non-profit interest rate 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 efforts the federal government’s response to the Coronavirus crisis. They are strongly committed to providing the most effective and customer-focused solutions possible.
For additional information, please contact the SBA disaster customer service center at 1-800-659-2955 (TTY: 1-800-877-8339) or email disastercustomerservice@SBA.gov.
Visit SBA.gov/disaster for more information.