As the coronavirus pandemic continues to cause disruptions to businesses, the U.S. Small Business Administration (SBA) has announced its Coronavirus (COVID-19) Disaster Relief Lending program, which will offer certain small businesses and nonprofits affected by COVID-19 access to the SBA’s Economic Injury Disaster Loans.
As of today, small business owners in New York State are currently eligible to apply for an Economic Injury Disaster Loan, as well as business owners in the following designated states: California, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Indiana, Maine, Massachusetts, Montana, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, Rhode Island, Utah, and Washington. Additionally, specific counties in neighboring states (referred to as “contiguous counties” by the SBA) are also eligible. An up-to-date database of the states and “contiguous counties” can be found online at https://disasterloan.sba.gov/ela/Declarations.
To qualify for an Economic Injury Disaster Loan, the business must (i) have a physical presence in an area (which must be more than a P.O. box) that the SBA has designated a disaster-declared state or contiguous county, and (ii) must have sustained economic injury. Furthermore, only businesses without credit elsewhere are eligible for these loans.
While the specific terms of the loans will be determined on a case-by-case basis, the SBA has stated that the interest rate for small businesses will be 3.75% and 2.75% for non-profits that meet eligibility requirements. Depending on the borrower, the term of these loans can be up to a maximum of 30 years to keep loan payments affordable. The SBA has also stated that these loans can be in amounts up to $2 million (depending on economic injury sustained).
In a statement published to the SBA’s website, the SBA Administrator Jovita Carranza said, “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.”
This is very fluid and terms, conditions, and areas covered are constantly changing. For additional information on resources available to small businesses, click here.
