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. PA’s Governor Wolf has made this request so small businesses and eligible non-profits located in Pennsylvania can apply.
The definition of a small business varies depending on industry but in general a maximum number of employees of 250 and sales of $7.5 million apply although there are significant exemptions. You can check whether your business is small using the size standards tool.
Loans carry an interest rate of 3.75% for small businesses without credit available elsewhere (businesses with credit elsewhere are not eligible) 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 firstname.lastname@example.org.
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!