The corona virus (“COVID-19”) is here. While everyone is glued to their cell phones and smart TVs waiting to hear about the latest infection rates, governmental announcements and death tolls, many small business owners are increasingly concerned about the toll that forced closures will have on their ability to meet ongoing obligations, continue to pay workers, and generate future revenue.
Many of our clients have asked: What kind of economic relief is available to small business owners in response to the corona virus (“COVID-19”)?
Fortunately for small business owners, the U.S. Small Business Administration can provide an Economic Injury Disaster Loan (“EIDL”) to help small businesses cope with the economic effects of COVID-19. The purpose of the EIDL is to provide working capital to help small businesses and non-profit organizations of all sizes meet their financial obligations.
- Who is Eligible?
In many states including Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Illinois, Indiana, Louisiana, Maine, Maryland, Massachusetts, Michigan, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Virginia, Washington, and West Virginia assistance through the EIDL program is available.
- Terms of the Loan
The EIDL program offers loans with a maximum interest rate of 3.75% for small businesses and 2.75% for non-profit organizations. EIDLs can be used to finance accounts payable, debts, payroll, and other expenses.
The application process considers the business’ credit history, tax returns, and available collateral for any loans exceeding $25,000. The loan application can be found at https://disasterloan.sba.gov/ela/Account/Login. EIDLs are limited to $2,000,000, unless the business is considered a major source of employment to the state. Loan repayment terms vary by applicant; however, a maximum repayment period of 30 years may be available.
- Conclusion
The foregoing is only one of the resources available to small business owners during this crisis. More information will become available in the upcoming days and weeks. Rosenberg Martin Greenberg will continue to post material relevant to businesses as they manage through this situation.
