The Coronavirus Preparedness and Response Supplemental Appropriations Act (the Act) that passed on March 6, 2020 allows small businesses that have suffered substantial economic injury as a result of COVID-19 to apply for low-interest federal disaster loans through SBA. Small businesses and nonprofits can apply for working capital loans of up to $2 million.
The following are key details of the Act as it pertains to the low interest rate loans. You can also learn more by visiting the COVID-19 disaster assistance page on SBA’s website.
- State governors must first request access to the Economic Injury Disaster Loan program. Once the declaration is made, information on the application process for disaster loan assistance will be made available to affected small businesses within the given state. The SBA Economic Injury Disaster Loans are available to the entire Commonwealth of Virginia.
- Loans carry an interest rate of 3.75% for small businesses and 2.75% for nonprofits.
- Loans can be used to cover accounts payable, debts, payroll and other operating expenses.
- Loans can be offered 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.
- Businesses will apply for loans online and select “Economic Injury” as the reason for seeking assistance.
- SBA offers disaster assistance via its customer service center. If you have questions or want to check if your state is eligible, contact U.S. Small Business Administration via phone at 800.659. 2955 (TTY: 800.877.8339) or e-mail firstname.lastname@example.org.
The Coronavirus situation is changing rapidly, as are the updates to various relief efforts. SIMA will continue to monitor news and keep you updated as clarification is provided.
SIMA’s COVID-19 Consulting Taskforce is here to support and guide you.