The U.S. Small Business Administration (SBA) has announced it will provide disaster recovery loans to small businesses impacted by coronavirus-related disruptions.
“Our agency will work directly with state governors to provide targeted, low-interest disaster recovery loans to small businesses that have been severely impacted by the situation,” said SBA Administrator Jovita Carranza in a prepared statement.
The SBA has made information about these new disaster recovery loans related to COVID-19 disruptions available on its website.
Carranza’s office detailed the process for accessing SBA’s Coronavirus (COVID-19) Disaster Relief Lending 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, nonprofit 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.
- SBA’s Economic Injury Disaster Loans offer up to $2 million in assistance and can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.
- 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 percent for small businesses without credit available elsewhere; businesses with credit available elsewhere are not eligible. The interest rate for non-profits is 2.75 percent.
- 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 is strongly committed to providing the most effective and customer-focused response possible.
Interested businesses are being encouraged to contact the SBA disaster assistance customer service center at (800) 659-2955 (TTY: (800) 877-8339) or by email at firstname.lastname@example.org.