As COVID-19 continues its spread across the world, small business owners are being forced to confront the economic turmoil it’s causing.
Due to this unprecedented global health crisis, health and government officials are working together to find solutions to the financial hardships facing many businesses. Companies across the country are being encouraged to help keep their employees and customers healthy, either through social distancing or temporary shutdowns. However, the economic impacts of these steps are causing cash flow issues for millions of business owners. In response to this, the federal government is making low-interest disaster loans of up to 2 million dollars available to businesses.
The Small Business Administration’s Economic Injury Disaster Loan program aims to provide vital economic support to small businesses — by helping them overcome a temporary loss in their revenue through a loan of up to 2 million dollars in working capital. This will hopefully enable small companies to continue operations through this turbulent time.
If you’re a small business and you’re thinking about applying to the SBA’s Economic Injury Disaster Loan program, here are some things you need to know.
The SBA is offering small businesses that have been impacted by COVID-19, low-interest disaster recovery loans.
The terms and conditions of these disaster loans are determined by your business’s ability to repay the loan; therefore, you will be subject to a credit check, as well as having an independent verifier estimate your damages.
The interest rate of the disaster loan is set at 3.75% for small businesses, and 2.75% for nonprofits. In addition, the loan term of disaster loans will not exceed 30 years.
If your small business is experiencing economic loss due to the Coronavirus pandemic, you may be eligible for a Small Business Administration Disaster Loan.
Disaster loans are only available to businesses that cannot secure alternative funding and are located in a government-declared disaster zone.
As all U.S. states and territories are currently declared disaster zones due to COVID-19, small business owners across the country are eligible to apply for a low-interest loan.
If you want to apply for a coronavirus small business loan, the easiest way to start your application is online via the Small Business Administration website. However, if you don’t have access to an internet-connected computer or smartphone, you can also call the Small Business Administration at 1‐800‐659‐2955.
Unfortunately, due to the infectious nature of the Coronavirus, it’s not possible to apply for your small business disaster loan in-person, due to the risk of transmitting COVID-19. However, the good news is that applying online is much safer and faster.
Due to unprecedented demand and high online traffic, the Small Business Administration recommends that anyone applying for a disaster loan should opt to do it during non-peak hours, for example, from 7 pm to 7 am.
Alternatively, you can also apply by mail; however, this process is likely to take much longer.
Apply for a loan - The first step is to apply for your loan online, or via telephone or mail. At the time you apply for your loan, it’s also possible to request up to a $10,000 advance on an Economic Injury Disaster Loan for emergency capital.
Wait for a decision - Once received, the Small Business Administration will review your loan application, verify your information, and make a loan processing decision. This typically takes two to three weeks; however, due to high demand, it may take longer than usual. You can expect periodic updates throughout the process.
Receive Your Funds - When the Small Business Administration approves your loan, you will receive Loan Closing Documents that must be submitted. Once this is complete, you can expect an initial disbursement of loan funds to be made within five days.
https://www.sba.gov/funding-programs/disaster-assistance, https://www.sba.gov/page/disaster-loan-applications#section-header-0, https://www.sba.gov/page/disaster-loan-applications