SBA loans available for small businesses suffering due to coronavirus
The United States Small Business Administration (SBA) issued guidelines for how to apply for $2 million in low-interest loans for working capital to small businesses suffering substantial economic injury as a result of the coronavirus (COVID-19). 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.
- Ohio Gov. Mike DeWine sent a letter and application to the U.S. Small Business Administration on March 18 to qualify the state of Ohio for the Economic Injury Disaster Loan program.
- Once a declaration is made by the SBA approving Ohio, the information on the application process for Economic Injury Disaster Loan assistance will be made available to affected small businesses within Ohio.
- 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. 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 in addition to the Trump administration’s announcement of $300 billion in loans to small businesses as part of a stimulus package that will incentivize small businesses to retain employees.