Crow Shields Bailey PC – SBA Disaster Assistance Loans
SBA to Provide Disaster Assistance Loans for Small Businesses Impacted by Coronavirus (COVID-19)
Who is eligible?
These loans are for small businesses, agricultural cooperatives, aquaculture enterprises, and nonprofits affected by disaster to help meet working capital needs or normal business operating expenses through the recovery period. They are available to for profit and non-profit companies.
Small businesses, for purposes of these loans, have 500 or fewer employees.
What can these loans be used for?
Loans may be used to pay fixed debts, payroll, accounts payable, and other operational bills that can’t be paid because of the disaster’s impact. They cannot be used to expand or refinance existing debt or cover lost profits.
What is the maximum loan offered?
What is the interest rate on these loans?
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%.
What is the term of these loans?
SBA offers loans with long-term repayments up to a maximum of 30 years. Loans are determined on a case-by-case basis, based on each borrower’s capacity for making monthly loan repayments.
When do repayments begin?
The first payment isn’t due until a year after the official date of the loan. However, interest starts accruing on the loan the moment the funds are disbursed.
On a case by case basis, loans offered under this program may have a forgiveness clause as a feature.
What do I need in order to apply?
Your business needs to operate in a current declared disaster area.
States or territories are required to certify that at least five small businesses within the state/territory have suffered substantial economic injury, regardless of where in the state those businesses are located as a result of a disaster. Once an economic injury declaration has been made for a state, loans will be available statewide. This will apply to current and future disaster assistance declarations related to Coronavirus (COVID-19).
Certain counties in Alabama, Florida, Georgia, Mississippi, and Tennessee have been declared disaster areas relating to Coronavirus (COVID-19).