SBA Disaster Assistance in Response to Coronavirus
The United States Small Business Association is offering designated states and territories low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of COVID-19. The SBA will issue, under its own authority, as provided by the Coronavirus Preparedness and Response Supplemental Appropriations Act that was recently signed by President Trump, an Economic Injury Disaster Loan declaration.
Delaware has been deemed an eligible area for SBA disaster loans.
Key facts about an Economic Injury Disaster Loan
- The SBA will make loans available statewide to small businesses and private, non-profit organizations to help alleviate economic injury caused by the Coronavirus.
- SBA’s Economic Injury Disaster Loans offer up to $2 million in assistance and can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.
- 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 is 2.75% for non-profits.
- The 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.
- The SBA’s Economic Injury Disaster Loans are just one piece of the expanded focus of the federal government’s coordinated response.
If you are a small business in the hospitality field, please refer to the prior blog regarding the Hospitality Emergency Loan Program (HELP). HELP is designed to provide financial relief for restaurants, bars and other hospitality industry businesses that employ thousands of Delawareans.