The COVID-19 outbreak has prompted unprecedented social distancing recommendations and mandated shutdowns. These steps are in place to reduce the spread of the virus, but pose a serious threat to small businesses who rely on customers visiting their restaurants and brick-and-mortar locations to stay afloat.
In an effort to reduce the negative impact of coronavirus, the U.S. Small Business Administration is offering (in designated states and territories) low-interest federal disaster loans for working capital to small businesses and private, non-profit organizations suffering substantial economic injury as a result of COVID-19.
SBA’s Economic Injury Disaster Loans, issued as provided by the recently-signed Coronavirus Preparedness and Response Supplemental Appropriations Act, offer up to $2 million in assistance for a small business. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing as a result of COVID-19.
Process for Accessing SBA’s Coronavirus (COVID-19) Disaster Relief Lending:
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 as well as updated on the SBA website.
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. 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 government’s coordinated response to current events, and the SBA and other organizations are working hard to soften the impact of COVID-19 on small businesses. For additional information on SBA’s disaster relief programs and policies, you can contact the SBA disaster assistance customer service center or check the SBA website.
Additionally, the knowledgeable team at Chase Law Group, P.C., is always available to answer questions and provide consultation for California businesses in navigating the impact of current events. Contact Chase Law Group at (310) 545-7700 for more information.