The United State’s Small Business Administration (SBA) has announced a financial kitty of $2 million to help small businesses that are hit the hardest by the ongoing coronavirus pandemic.
The fund is part of the SBA’s Economic Injury Disaster Loans support to small businesses, to help them rise above temporary losses in revenue. The financial aid support to the small businesses can be used to pay off the small business’s financial obligations including payroll and other accounts payables.
The coronavirus outbreak has impacted all spheres of our lives. The best strategy right now for most businesses is simply to ‘wait it out.’ As the medical scientist community work around the clock to come up with a cure, the best the business community can do is to mitigate losses.
A lot of companies are encouraging their staff to work from home. Although there are some companies who have decided to take the tougher route of letting go of their employees. That is quite disheartening because, as of now, there is no telling if the medical science community is any closer to finding a cure or vaccine.
How to Apply for the SBA Low-Interest Federal Disaster Loans
Small businesses suffering substantially from the ongoing coronavirus pandemic can cushion themselves by applying for the SBA low-interest federal disaster loan. To qualify for consideration for the loan, the small business must meet the following criteria:
- Must have 500 or fewer employees
- Be operating in an area recognized as heavily hit by coronavirus pandemic
The SBA Director, Jovita Carranza, in response to POTUS address to the nation, said:
“The President took bold and decisive action to make our 30 million small businesses more resilient to coronavirus-related economic disruptions. Small businesses are vital economic engines in every community and state, and they have helped make our economy the strongest in the world.”
How to Access SBA’ Coronavirus (COVID-19) Disaster Relief Lending
- 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, non-profit 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.
- 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 without credit available elsewhere; businesses with credit available elsewhere are not eligible. 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 federal government’s coordinated response, and the SBA is strongly committed to providing the most effective and customer-focused response possible.
For more information, you can contact the SBA disaster assistance customer service center through phone call 1-800-659-2955 (TTY: 1-800-877-8339). Alternatively, you can send them an email to [email protected]
Must Read: Six Essential Steps to Starting an African Specialty Business in the US
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