WASHINGTON—March 18, 2020—The U.S. Small Business Association (SBA) recently announced that it will provide low-interest disaster recovery loans to small businesses that have been impacted by the COVID-19 pandemic. According to a press release, SBA’s Economic Injury Disaster Loans offer up to $2 million in assistance for a small business. These loans are intended to provide economic support to small businesses to help overcome the temporary loss of revenue they may be experiencing as a result of the outbreak.
“Small businesses are vital economic engines in every community and state, and they have helped make our economy the strongest in the world,” SBA Administrator Jovita Carranza said in a statement. “The SBA will continue to provide every small business with the most effective and customer-focused response possible during these times of uncertainty.”
Carranza also stated that SBA’s District Offices would continue to provide counseling to small businesses on preparedness plans and resources available as we navigate this situation.
From the press release, the process for accessing SBA’s coronavirus disaster recovery loans is as follows:
- 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 states that it is strongly committed to providing the most effective and customer-focused response possible.
For additional information, please contact the SBA disaster assistance customer service center. Call 1-800-659-2955 (TTY: 1-800-877-8339) or e-mail [email protected].
The U.S. Small Business Administration empowers entrepreneurs and small business owners with the resources and support they need to start, grow, or expand their businesses, or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov.