Pursuant to the Coronavirus Preparedness and Response Supplemental Appropriations Act that was recently signed by the President, the U.S. Small Business Administration (“SBA”) is offering Economic Injury Disaster Loans to provide working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (“COVID-19”). The SBA’s Economic Injury Disaster Loans can offer up to $2 million to help small businesses overcome the temporary loss of revenue they may be experiencing as a result of COVID-19. The loans may be used to pay fixed debts, payroll, accounts payable, and other bills. The interest rate will be 3.75% for small businesses and 2.75% for non-profits, with a maximum 30-year payback period. Qualification for and terms of a loan will be determined on a case-by-case basis.
Status of Availability
At this time, the SBA has designated counties within 21 states to be eligible to apply for the SBA COVID-19 Economic Injury Disaster Loan. Additional areas are expected to be added daily. For up to date information and an updated listed of eligible counties, you can go to https://www.sba.gov/disaster-assistance/coronavirus-covid-19.
If your area has been declared as a designated area that is eligible for this program, you can apply for a loan at https://disasterloan.sba.gov/ela. Information regarding the SBA’s three-step application process can be found at https://disasterloan.sba.gov/ela/Documents/Three_Step_Process_SBA_Disaster_Loans.pdf.
If your area has not been declared as a designated area that is eligible for this program at this time, you cannot yet submit an application. However, it is advisable to begin gathering federal income tax returns, bank statements, and other financial documents in digital form in order to prepare and submit the application as soon as possible if it becomes available. Keep in mind that there is no guarantee your area will be designated in the future.
Resources are available for applicants to the SBA COVID-19 Economic Injury Disaster Loan Program. If you have questions regarding the program, you can reach out to your local SBA office. They may be able to put you in contact with free local resources which can provide assistance with the preparation of the application.
For businesses located in Michigan, the Small Business Development Center (“SBDC”) is available to assist with the preparation of the application once it becomes available. The SBDC can be reached at 734-487-0355.