SBA Economic Injury Disaster Relief Loans (EIDLs)
- Applicants may apply by visiting the SBA’s secure access site at: https://disasterloan.sba.gov/apply-for-disaster-loan/index.html Note: you may experience instability with the website due to high volume, so you may want to try the email address listed below.
- Disaster loan information and application forms may also be obtained by calling the SBA’s Customer Service Center at (800) 659-2955 ((800) 877-8339 for the deaf and hard-of-hearing) or by sending an email to: disastercustomerservice@sba.gov
Program Terms (as of March 26, 2020):
- Maximum Borrowing Amount: $2,000,000
- Use of Funds: Pay fixed debts, payroll, accounts payable and other expenses that could have been paid had the disaster not occurred.
- Rate: 3.75% for Businesses and 2.75% for Non-Profits
- Term: Up to 30 years based on the ability of the borrower to repay
- Collateral: SBA will not decline a loan for lack of collateral, but requires borrowers to pledge what is available, including real estate. This collateral requirement may be waived with legislation under discussion in Congress.
- Stated Timeline for Approval: 2-3 weeks
- Applicant is physically located in a declared disaster county and suffered working capital losses due to the declared disaster, not due to a downturn in the economy or other reasons
Must be a small business as defined by the SBA — generally fewer than 500 employees or size standards established for specific industries, any individual who operates as a sole proprietor, or as an independent contractor.
If you have any questions about this type of disaster relief loan, they have a 24/7 call center that can be reached at 1-800-659-295. I have already called them myself today and was able to get through to a live person within 10 minutes.
SBA Loan – Small Businesses *New Advance of up to $10,000 *added April 15th
On March 29, 2020, following the passage of the CARES Act, the SBA provided small business owners and non-profits impacted by COVID-19 with the opportunity to obtain up to a $10,000 Advance on their Economic Injury Disaster Loan (EIDL). The Advance is available as part of the full EIDL application and will be transferred into the account you provide shortly after your application is submitted. To ensure that the greatest number of applicants can receive assistance during this challenging time, the amount of your Advance will be determined by the number of your pre-disaster (i.e., as of January 31, 2020) employees. The Advance will provide $1,000 per employee up to a maximum of $10,000.
Another type of loan that the SBA is offering is the Paycheck Protection Program
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.
SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.
The Paycheck Protection Program will be available through June 30, 2020.
Who Can Apply:
- Any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons)
- Private non-profit organization
- 501(c)(19) veterans organizations affected by coronavirus/COVID-19.
How to Apply:
You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program. Here’s the link to the list of venders, by state: https://www.sba.gov/partners/lenders/microloan-program/list-lenders.
Lenders may begin processing loan applications as soon as April 3, 2020.
Loan Details and Forgiveness:
- The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.
- Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
- This loan has a maturity of 2 years and an interest rate of .5%.
- If you wish to begin preparing your application, you can download a sample form to see the information that will be requested from you. The sample form is attached.
In addition to being a small business owner, if you are do not own your home as your primary residence, there are also other resources to assist renters at this time, specific to the city you live and rent in.