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The SBA is giving out loans to businesses affected by COVID-19 through the Small Business Administration Economic Injury Disaster Loan Program.
The first thing to know about this loan program is that information is changing every day. For the most up-to-date information, please visit the SBA website.
The loans go up to $2,000,000 and they are capped at a 4% interest rate. Some businesses and nonprofits will qualify for lower than 4% interest. The term of the loan can go up to 30 years, but that is determined on a case by case basis.
In order for your business apply, your state has to be eligible for one of these loans. Some governors have already applied, others are in the process, others have not applied yet. Once your state is eligible for these economic injury disaster loans, then you can apply for the loan.
After applying, the SBA will assess your credit-worthiness and your ability to repay the loan. If you’re applying for over $25,000, you will need to put up some collateral. If you’re applying for less than that, you do not need collateral.
If you have ever had an SBA loan in the past and you’ve been deemed noncompliant for one reason or another, you will not be eligible for these loans. Furthermore, the funds received through these loans cannot be used to pay off existing long-term debt.
So that’s just a brief rundown of the Small Business Administration’s Economic Injury Disaster Loan Program. It’s changing every day, so check out the SBA’s website for developments.
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