The U.S. Small Business Administration thru its disaster relief program is offering low-interest coronavirus disaster relief loans for working capital to California, New York, Washington, and dozens of other state’s small businesses that are suffering substantial economic damage as a result of the COVID-19. Not all states have applied for this program. For a complete list of adopting states here.
The SBA acted under its own authority, as provided by the Coronavirus Preparedness and Response Supplemental Appropriations Act that was recently signed by the President, in response to state governors seeking aid.
Eligibility for Economic Injury Disaster Loans is based on the financial impact of the COVID-19. The loans are for amounts of up to $2,000,000, with interest rates ranging from 3.75% for for-profit businesses and 2.75% for non-profit organizations. SBA is offering these loans with long-term repayment options in order to keep payments affordable, up to a maximum of 30 years. The loans are broadly available.
In order to qualify, the applicant must demonstrate economic injury and must demonstrate the ability to repay loan. Collateral is not required. Demonstration of economic injury and ability to repay will be done primarily by providing 3 years of financial statements. Failure to provide historical financial statements may result in delay or denial of approval. However, if the applicant does not have 3 years of history, they may apply anyway, and a case worker will be assigned to review the particular case.
If all the information provided is accurate and complete, it will take 18 to 21 days for approval from date of submission. Once the application is approved, it will take 5 days for the loan to fund. Incomplete applications will result in delays.
Applicants may apply online, receive additional disaster assistance information and download applications at https://disasterloan.sba.gov/ela.